Impacts of Political Instability on the Tourism Industry in Ukraine

Abstract

The purpose of this research paper is to learn about how the tourism industry in Ukraine has been hit by the political instability in the country and how it has reacted to mitigate its negative consequences. The data were collected via a self-administered questionnaire completed by 102 hotel managers and 73 travel agency managers in Ukraine.

Mann-Whitney U-test, Kruskal-Wallis χ2 test and t-test were used to analyse differences in respondents’ answers by category, size, location, region and chain affiliation of hotels. Mann-Whitney U-test was used to investigate the differences in travel agency managers’ responses on the basis of licence type, region, main market segment and IATA certification of the agency. The findings confirm previous research results that political instability leads to negative impacts on the tourism industry of a country – decreased revenues, plummeting numbers of tourists and overnights, and increased costs. This was valid not only for the regions that were neighbouring the conflict areas, but for the rest of country as well, although the former were more severely hit by the political instability than the latter.

The findings further revealed differential effect of the political instability on the accommodation establishments and travel agencies on the basis of their characteristics. This is the first-known survey of the tourism industry in Ukraine following the political turmoil of 2014 that illustrates the impact of the political instability to the tourism industry, as well as elaborates the tactics that hoteliers and travel agency managers in Ukraine are taking to counteract the shock.

Keywords: Ukraine, political instability, crisis, hotel, travel agency