While travel to exotic locations like Hawaii, Fiji or Europe are down markedly in the past two years, they are beginning to recover. One of the other interesting and actually positive results of the worldwide recession on tourism is that it has been a boon to local tourism destinations - those that cost less and are closer to home.
So while Disneyland's numbers may be off, the wine tourism industry is booming, as are trips to state and national parks and beaches: destinations that can be enjoyed for less money.
We have seen a loss in tourism related jobs, where large numbers of airline pilots have been laid off and the number of flights have been cut, although this has mostly stabilized. The cruise lines are also hurting.
In a phrase, quite a bit. The fact of the matter is that people are not inclined to take vacations and engage in tourist activities when there is little in way of financial security. Consider the fact that unemployment still haunts individuals, people are working longer hours for the same compensation as before the crisis, and consumer confidence is still not at pre- crisis levels. In such a setting, consumers are not likely to engage in "luxuries" or activities deemed as luxurious such as travel and tourism. It simply does not make sense for them to engage in such behavior with fear being present. Alternatives to traditional tourism has been an emergence in "recession tourism," which means people travel to locations where the dollar can be stretched further or people seek to go to more generic locations for tourist activities.
All the goods and services people use and buy can be ordered according to how essential these are for them. Basic necessities of life like food, clothing and shelter are some of the most essential requirements in life, while luxuries like decorating the wall in your house with a $100,000 dollar original painting by a master is a luxury.
People in times of economic crisis, when their current income as well as future prospect of good income takes a beating, people try to reduce their expenses by cutting down expenses that are at the top end of non essential items. In this way economic crises affects demand of non-essential goods more than that of essential products.
Tourism is definitely not a necessity of life like food. At the same time it is not near the top of the scale of non essential goods. Still it is fairly high on the side of non-essential goods. People can do without taking a holiday for some time without suffering very much. Also people can reduce the expenses on tourist activities by taking less holiday, taking holidays of shorter duration, and by visiting nearby place rather than distant locations. In this way economic downturn is likely to reduce substantially the tourism activity. Particularly tourism to distant locations, like to overseas destinations, and places which are costly for tourists is likely to experiences heavy reduction in demand.