Risk Aversion.
The major health scare surrounding the world currently is the outbreak of the swine flu, which has claimed numerous lives thus far. Outbreaks have been recorded in several countries, including here in the United States. The fear of the swine flu is spreading quickly amidst our economy and is especially effecting our travel sector. Travel has decreased as travelers have cancelled flights and flights have been banned to certain areas. This is certainly not what we would like in our already struggling and weak economy.
In choosing whether to make the decision to travel, people are going through the pattern of risk aversion. In risk aversion, people place more weight given to possible losses than possible gains in decision making. People respond to the power of potentially bad events by making their decisions so as to reduce risks. For many travelers, the risk to travel to a nation that has endured an outbreak does not outweigh the safety and gains of staying healthy where they are. The risk of contracting swine flu is considered to be worse off. The travel industry currently has to rearrange flights and keep track of the swine flu outbreak. The industry can only sit and wait for the outbreak to die down. While they hope people do not overreact, they do want to be prepared.
http://www.usatoday.com/money/industries/travel/2009-04-27-swine-flu-travel-industry-hurt_N.htm
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