Universal Journal of Management and Social Sciences Vol. 2, No.8; August 2012 62 Assessing the Economic Effects of Insurgency on Hoteling Industry of Swat Ahmad Ali 1 , Mussawar Shah 2 , *Imran 3 , Abbassullah Jan 4 , & Gul Man-U-Ddin 5 1 MPhil Scholar in Sociology, Department of Rural Sociology, KP Agricultural University Peshawar, Pakistan. 2 Professor and Chairman, Department of Rural Sociology, KP Agricultural University Peshawar, Pakistan. 3 Lecturer of Sociology, Department of Social Work and Sociology Kohat University of Science and Technology (KUST), Kohat , Pakistan. 4 Associate Professor, Department of Agricultural Economic, KP Agricultural University Peshawar, Pakistan. 5 Department of Rural Sociology, KP Agricultural University Peshawar, Pakistan. *sociologistimran1@gmail.com Abstract The present study deals with the effects of terrorism on tourism (Hoteling industry) in the aftermath of the present insurgency in Swat. The study proceeded with the objective i.e. to investigate about the effects of insurgency on hotel industry. A sample size of 288 respondents associated with this industry was selected on random sampling procedure. T-test Statistics was used to measure the difference between pre and post scenario with reference to this study. It was found that the number of small and medium enterprises were badly affected after terrorist activities (P=0.000), Domestic product values declined (P=0.000), unfair distribution of benefits in community (P=0.000), sale and tax revenue declined (P=0.000), employees dependency on tourist declined (P=0.000), salaries declined (P=0.000), security charges increased (P=0.000), permanent and casual staff decreased (P=0.000), along with expenditure of local staff decreased (P=0.000). On the basis of study findings, loans on soft term, for small and medium enterprises, special packages for affected industry employee, propagation of local values, which entails hospitality for non-locals through media, with strong participation of local’s leaders were recommended as major ingredient of economic revival in the study area. Keywords: Insurgency, hoteling, economic revival and T-test Statistics 1. Introduction Gloďal Terrorisŵ has ďeĐoŵe a harsh realitLJ iŶ todaLJs soĐietLJ. It is usuallLJ ĐoŶfirŵed iŶ ŵaŶLJ forŵs aŶd manifestations of including hijacking of aero-plane right since the inception of aero-plane industry, suicide attack, self-suicide bombing which world has been witnessing since long either through attacks on peace keeping troops, the elimination of world trade center etc, created a horror across the globe (Enders, 2002 and Lake, 2000). Several attempts are made to reduce inflicts of terrorism (Luechinger, 2003). By using counter terrorism force as policy deterrence with imposition of sanctions of more events to curb actual and preventive attempt to treat across the world in general and rope in particular are taking appropriate measures for capturing the menace of terrorism. Growth and development with major focus on rural development has witnessed an increase in spending on military hard ware as well as equipping the personal of homeland security systems with modern weapons and training for making them effective to cope with this phenomenon ensuring sustainability of economic growth and development (Ruys, 2004). These countries are passing through small states heavily dependent on tourism as a main economic activity to generate income. Particularly, for deǀelopiŶg ĐouŶtries suĐh as the Maldiǀes tourisŵ is aŶ esseŶtial sourĐe of reǀeŶue generation and therefore, a major part of economic development. Tourism is an industry flourishing as indicated by figure addressed by United Nation World Tourism Organization (2010). In foreign exchange, 7770 billion dollars were generated for recipient countries in 2007. The data further explore that tourism growth for developing countries has attained a share of 40 % in 2008 against the rest of the world (Sonmez, 1998). Research themes which emerge from available studies include impacts of Terrorism and political instability on tourist demand, motives of terrorists in targeting tourists, using tourism a political tool, the effects of political violence on destination image crisis management and recovery of marketing efforts. Swat a paradise on earth situated one of a deadliest- period of its history where terrorism sprout and crippled the peace and normalcy. It badly affected all activities pertaining to life including the economy, which is pre dominantly based on tourism. The present study is an attempt to dismantle the effect of terrorism on tourism in the pre and post occurrence phenomena.