TRAVEL IMPACT NEWSWIRE – Edition 76 (2009) – 20 October 2009
HOW TO RESTORE THE BALANCE, FROM A UNIQUE ASIAN PERSPECTIVE
"The travel & tourism buzzword of the 21st century will be the search for balance." That forecast by Imtiaz Muqbil, Executive Editor, Travel Impact Newswire, in the monthly strategic intelligence publication of the Pacific Asia Travel Association in February 1999, is proving spot-on as the word "balance" resonates across all industry sectors today.
In the past few weeks, Imtiaz Muqbil has spoken at a UN World Tourism Organisation Conference on Destination Management in Hangzhou, China; contributed to a discussion on the future of the Silk Road at the UNWTO General Assembly in Astana, Kazakhstan; moderated a Skal Club of Bangkok membership meeting on the future of the global Skal club movement; and moderated a panel discussion at the ASEAN Hotel & Restaurant Association Congress (AHRA) on “The Future Vision of ASEAN Hospitality”. He is due to speak at a UNESCO conference on the Power of Peace in Bangkok later this month.
Travel industry conferences seeking a speaker who can offer some unique historical hindsight, unconventional foresight and thought-provoking insight on the past, present and future of the Asia Pacific travel & tourism industry can contact Imtiaz Muqbil at firstname.lastname@example.org
1. Tourism SMEs Get Little Relief As Crises Strike
(The following is a brief introduction to a report entitled “Survival at Stake for Small & Medium Sized Enterprises in Asia Pacific Travel & Tourism” to be presented at the ITB Asia in Singapore on Oct 23, 2pm to 3pm at Room 204, Suntec Level 2. Unless anyone believes otherwise, the next crisis is just around the corner, and industry SMEs are being worst hit. Ensuring their survival in an era of continuous bust-and-boom cycles is now an industry imperative.)
By Imtiaz Muqbil, Executive Editor, Travel Impact Newswire
The past 12 months have seen the Asia-Pacific travel & tourism industry experience some of its worst declines in visitor arrivals since 2001, a clear outcome of the well-documented combination of natural and man-made crises. Amidst the charts, graphs and figures, a very glaring omission is specific data on the downstream impact of this downturn on jobs, businesses and communities, especially small and medium sized enterprises (SMEs).
In the past year, not a single Asia-Pacific national tourism organisation has reported figures on the number of SMEs forced to downsize or shut down. Nor is it known how many jobs have been lost or the overall “indirect” impact of reduced visitor spending.
An industry that was once at the forefront of doing “Tourism Satellite Accounts” which meticulously measured in great detail the positive impact of travel & tourism on economies, Gross Domestic Product and jobs suddenly seems to have gone cold. TSAs, it seems, are only produced when times are good.
The website of the World Travel & Tourism Council has an excellent Tourism Impact Data Forecasting Tool which provides generic forecasts and economic impact data. This provides good estimates, and hence some kind of a yardstick, but lacks specifics on individual countries.
Similarly, the UN World Tourism Organisation’s “Roadmap to Recovery”, published at its General Assembly in October 2009, included a comprehensive compilation of stimulus measures (see further details below) taken by about 70 countries to boost travel & tourism. While some of these stimulus measures were directed at SMEs, missing entirely was actual data on how badly the industry at large and SMEs specifically have been hit by the downturn.Hence, a lot of data is available on the “medication” being dispensed to the industry, but little or no data on how deep the “ailment” has permeated. Decision-makers know the industry is “sick”; they just don’t know which part of the body has been most affected, and to what extent.
This is very unusual.
In the 1990s, the very detailed TSAs produced by WTTC globally, regionally and nationally played a significant role in “driving” tourism growth by providing decision-makers, mainly ministers of economics, finance, tourism and transport with calculated guesstimates on the direct and indirect impact of travel & tourism.
This allowed the entire policy-making apparatus to be “sexed-up” and led to a string of measures that facilitated extensive liberalisation of the travel & tourism industry, along with accompanying investment in infrastructure and marketing.
As it enters its final few months, the first decade of the 21st century has not been so fortunate. It has been marked by an unprecedented list of geopolitical, economic, environmental and financial crises which have hit travel & tourism. Clearly, if in the boom days, travel & tourism generated jobs and economic growth which could be measured, the wider impact of the decline in visitor flows should be similarly trackable.
The report to be presented at ITB Asia 2009 is designed to make a case to do just that, with a view to undertaking a more comprehensive review of the way tourism growth has been managed in the last 20 years, and charting a future course based on a new set of parameters.
So far, the growth has been mainly top-down-oriented, largely favouring large companies with multi-million dollar investment funds. But as the industry prepares to enter the second decade of the 21st century, the next generation of growth may well need to be less rushed, more conservative and most certainly driven by bottom-up priorities.
This will involve learning from the mistakes of the first decade, including the negative impact of globalisation and the need to break out of the boom-and-bust cycles that are becoming the norm rather than the exception.
Clearly, the Big is Beautiful era is over. Aircraft are unlikely to get any bigger than the A380. Nor are convention centres, cruise ships and airports likely to get any bigger than they are now. Privately-owned multinational companies are no longer considered “too big to fail.” In fact, the opposite is now the case – the bigger they are, the harder they fall.
Focussing on the SMEs is a good option for the new era to come.Indeed, SMEs are gaining both recognition and respect. Big-ticket projects may be politically and economically desirable but they have proven to be more risky and add to debt, distressed inventory and “bubbles” that have triggered many other downstream economic problems. Boutique hotels, niche-market tour operators and low cost airlines are gaining ground.
Small, independent, locally-owned companies are not just an insurance against crisis but they also protect against the vagaries of globalisation, offer some kind of safeguards against external shocks and buttress the independence and sovereignty of countries.
Just as Asian countries were able to learn from the 1997 economic crisis and protect themselves from the latest global financial crisis, so too do they need to learn from the school of hard-knocks to re-design and re-engineer their future growth trajectories.
ITB Asia and Travel Impact Newswire have long foreseen the importance of SMEs in the economies of the Asia Pacific. An earlier report on SMEs in the Asia Pacific travel & tourism industry was compiled in 2008 and released at the ITB Asia 2008. Also available for download on the ITB Asia website, its conclusions and recommendations are now more valid than ever, and have been proven right by the evidence compiled in this sequel report.
The articles compiled in this second report indicate that governments realise how SMEs across many different sectors of national economies have been affected by the global crises. They show that the governments, banks, consultancies and companies are moving to provide much-needed help. How much of that help is being availed of by travel & tourism companies needs to be far more closely examined.
One of the most important, and noteworthy, elements of the report was the zero response from the industry to requests for data input. Several emails to the national tourism organisations, face-to-face requests as well as published requests in Travel Impact Newswire elicited no response.
This suggests that the NTOs have neither the time nor interest in the issue, or they have nothing of value to report.
Either way, it only lends more weight to the conclusion that SMEs in the travel & tourism industry are neither getting their fair share of the assistance, nor are they mounting a strong case to get the assistance they deserve. This is both the result of weak leadership and poor institutional frameworks, both of which will need to be rectified in an era when crises are becoming the norm rather than the exception.
At least three examples are cited in this report about how a focus on SMEs is becoming critical to the entire restructuring process now under way in the travel & tourism industry at large:
The Pacific Asia Travel Association (PATA) is being totally revamped with a focus on its smaller chapter members. The regional industry association had to undergo a major U-turn in its future direction after discovering that becoming a rich-man’s club was not a sustainable option for survival.
Amadeus, the travel technology company, is producing a slew of new products and processes to ensure the survival of SME travel agents, who were earlier thought to be facing extinction due to the impact of technology, but are now again being wooed by the same airlines that once shunned them.
Brunei Darussalam, demographically the smallest country in the Asia Pacific, is focussing on developing its SMEs by promoting tourism and the concept of a halal (the Islamic equivalent of Jewish ‘kosher’ food) industry to tap the massive export market potential of the world’s 1.5 billion Muslims. This is an intrinsic part of its economic development strategy for the post-oil era.
All these are documented in further detail later in the report.
As the survival of SMEs in Asia Pacific travel & tourism will become more critical with every crisis, the report is designed to act as an early warning as well as a resource base for decision-making. The items compiled in the report can act as an idea-bank on which to formulate a future plan designed specifically for travel & tourism SMEs.
The report has been compiled and prepared along the same lines as the UN World Tourism Organisation (UNWTO) study, “Roadmap to Recovery.” It is the result of close and detailed monitoring of relevant developments and announcements affecting SMEs across all industry and economic sectors since the beginning of 2009.
Hopefully, it will help international, regional and local trade organisations seize the opportunity to work together and address this issue at a common level. There is no better time than now to develop a solid campaign based on survival of the SMEs.
This can also involve addressing one of the major imbalances in the way travel & tourism has been approached so far. Public money needs to be redirected big time into training and human resources development
Well-trained and qualified SME entrepreneurs will develop their own networking resources, and take care of their own marketing efforts. Water will find its own level.
Finally, the industry’s political masters may well find that a grateful electorate could reward them for their generosity and assistance come the next elections.
2. UNWTO Joins The ‘Restructuring’ BandwagonAstana, Kazakhstan: The restructuring “bug” sweeping through international travel industry associations last week spread to the UN World Tourism Organisation (UNWTO) which is set to undergo a complete internal and external overhaul following the election of a new secretary-general. Former Jordanian tourism minister Dr Taleb Rifai, the first Arab to run the 154-member body of global tourism, won the approval of the General Assembly to carry out sweeping reforms in the way the Madrid-based organisation is run, administered and services its members.
Set to officially take over as of January 2010, Dr Rifai noted the significance of these changes being approved in Kazakhstan, a country at the crossroads of Eurasia, when the future of the UNWTO itself was at the crossroads along with the entire travel & tourism industry.
Referring to it as an effort to “reinforce your sense of ownership of this organisation,” Dr Rifai briefed representatives of the world’s tourism ministries and national tourism organisations on plans to abolish all the UNWTO’s internal units and departments and replace them with a project- and programme-driven structure designed to deliver tangible and measurable results.
He preambled the announced changes by bluntly acknowledging that many in the travel & tourism industry itself do not know what the UNWTO does. “People don’t know about us,” he said. “Our image is rather weak. People still get a questioning look on their faces when they hear our name.” He said the linkages between the UNWTO and a number of external affiliations established over the years would be reviewed, and efforts made to boost linkages with other U.N. agencies, especially the International Labour Organisation.
A new decentralised decision-making apparatus would be created under the charge of three new executive directors being brought in from outside: Marcio Favilla, former vice minister of tourism, Brazil; Dr Zoltan Somogyi, former tourism secretary, Hungary; and Frederic Pierret, former director of tourism, France.
While stressing that these were all capable and highly qualified people selected from amongst the nominations by the regional commissions, Dr Rifai indicated that he would have liked to see more women in the line-up. He also noted the lack of representation from Asia or Africa.
However, in addressing this and various other details of his proposed programme, Dr Rifai stressed clearly that these were all first steps in what would be a long and arduous path, and that more fine-tuning improvements would be made in line with feedback from members.
Welcoming future scrutiny and the challenge of delivering on his plans, he repeatedly reminded delegates that he was acting in accordance with all the rules, regulations and processes that the members themselves had approved in previous general assemblies.
He recognised the demands by the members to deliver better results, make more efficient use of funds, adhere to the requirements for transparency as well as the intangible need not to ruffle any diplomatic or political feathers nor belittle the years of work done by the long-serving staff.
One example of this diplomatic minefield was in dealing with visas and travel advisories. Although countries like Kenya, Nepal and Pakistan vehemently denounced travel advisories, a resolution on the matter had to be phrased in the nicest of language in order not to upset the advisory-issuing countries.
Dr Rifai sought the members’ cooperation to give him the time, cooperation and support to make things work, noting that the industry itself is undergoing significant change, and being impacted by unforeseen “external shocks” that often see the best-laid plans being overtaken by events.
Noting the good news that the UNWTO, with its 25 million Euro budget for 2010-11 was in a healthy financial state, Dr Rifai said that in future a lot more effort would be made towards mobilising funds through external sources and bringing in more affiliate members.
Dr Rifai also announced he would be revamping the UNWTO website, improving the communications platform, upgrading the headquarters building, making better use of technology and cutting back on a voluminous and cumbersome paper-based distribution process.
One critical issue now happily resolved is South Korea’s future role in the UNWTO. Dr Rifai won the top post after a bruising election battle against a Korean candidate. However, the Koreans indicated that there were no hard feelings by applying for, and winning, the right to host the next General Assembly in 2011.
The restructuring bug has now struck PATA and the UNWTO. Next in line are believed to be the United Federation of Travel Agents Associations and Skal Club International (both due to meet in November) and soon enough, the ASEAN tourism groupings (set to meet in January 2010 in Brunei).
3. Tourism Featured In Global Economic Stimulus Packages, But Only JustAstana, Kazakhstan -- More than 70 countries included travel & tourism in the economic stimulus packages they enacted to mitigate the impact of the global economic crisis, according to a report to be presented to the UN World Tourism Organisation General Assembly here this week.
Entitled “Roadmap to Recovery,” the report is a survey of all UNWTO Member States and was conducted by the UNWTO Secretariat between March-August 2009, as well as through online research. It is to be the centrepiece of discussions when the world’s tourism ministers meet here from 5-8 October for the 18th UNWTO General Assembly.
The report is designed to help the ministers swap experiences as they seek to chart a recovery from the unprecedented economic, climate, social and health challenges that are expected to impact on the future of global travel & tourism well into the next decade.
It shows that most countries implemented travel & tourism stimulus measures in the areas of marketing, mainly aimed at the domestic market, and in enhancing public/private partnerships. These are the areas where national tourism administrations/organizations have a direct and immediate mandate and can act more rapidly.
A significant number of countries also enacted fiscal and/or monetary measures in order to ensure that tourism businesses continue to get access to credit and increase their liquidity, maintain their operations and retain jobs.
Finally, the report says, travel facilitation measures such as applying visa on arrival, decreasing the cost of visas or, in some cases even, exempting visa requirements for a certain number of source markets are major steps towards the resilience of the sector, and the economic recovery at large.
The report says that since the last UNWTO General Assembly convened in Colombia in November 2007, travel and tourism “has had to endure the worst economic crisis since the Great Depression of the 1930s, accelerating trends of climate change and the influenza A(H1N1) pandemic.
It says international tourism is forecast to decrease by between -6% and -4% this year – which would be “the worst result in decades.” Growth is projected to be negative in all regions, except in Africa. Domestic markets, highly stimulated by many governments during the crisis, are expected to do slightly better.
Tourism earnings also are expected to suffer more than arrivals as consumers tend to trade down, stay closer to home and for shorter periods of time. Worldwide, companies, particularly small and medium enterprises, which make up the bulk of the tourism sector, face increasing difficulties as demand declines and access to credit became harder, the report says.
This year’s UNWTO General Assembly will seek ways to steer tourism on the path to recovery. Indeed, the Roadmap report calls on world leaders to continue to place tourism and travel at the core of stimulus packages and the Green New Deal.
It says that travel & tourism can play an essential role in the post-crisis recovery by providing jobs, infrastructure, stimulating trade and aiding development and should thus be a key consideration at future global economic summits.
“History shows that the biggest challenges provide the biggest opportunities,” the report says. “Today world leaders are working together in ways that would have been unimaginable at any time in the past, to coordinate and collaborate on their economies, their climate response and their development agenda.”
It says that the current crisis offers opportunities for the tourism sector to step up investment in human resources, in better market knowledge and in technology and innovation, as well to rethink the existing growth models and embrace the principles of sustainable development.
The report calls on UNWTO member states to “objectively scrutinise barriers to travel such as visa processes,” even more so in times of economic downturn. A declaration on the facilitation of tourist travel will be presented urging governments to consider measures such as simplifying visa applications and re-evaluating travel advisories.
The General Assembly also will call for responsible travel in the course of the swine flu pandemic, urging governments not to take unilateral measures that may unnecessarily disrupt global travel.
UNWTO has held two review and preparation exercises on ‘Travel and Tourism in Pandemic Conditions’ which will form part of a briefing on the status of the virus and its impact on the tourism sector. This is of particular importance given that October is the beginning of the winter flu season in the Northern Hemisphere.
This year, for the first time, UNWTO is preparing a special communications campaign and all Assembly proceedings will be made publicly available.
The General Assembly will also be called upon to ratify the appointment of Dr Taleb Rifai as the Secretary-General, as recommended by the UNWTO Executive Council. If approved, Mr. Rifai will begin his 4 year mandate in January 2010 when he plans to implement his agenda structured around membership, partnerships and governance.
4. French Pilgrim City Of Lourdes Seeks Asian VisitorsFrance is known more for its wine, fashion and shopping but one of its key destinations is slowly gaining popularity in Asia for a somewhat unlikely niche-market -- spiritual and religious tourism.
Located 812 kilometres south of Paris, the city of Lourdes is being frequented by Christian pilgrims largely from the Philippines but also increasingly from Thailand, Indonesia and Malaysia.
The city is known for the 18 apparitions of the Virgin Mary experienced in 1858 by Bernadette Soubirous, a 14-year-old girl suffering from cholera and tuberculosis who, after the apparitions and cleansing with the Massabielle spring water, went on to become a nun and live until 1879.
In 1875, according to the city’s historical records, the Assumptionist fathers began organising annual rail pilgrimages for the sick and disabled to the Massabielle Grotto, first from within France and later from all over Europe. Small hospices and accommodation centres emerged to meet demand.
In 2008, the 150th anniversary of the apparitions, the city received an estimated nine million visitors of whom 1.46 million were pilgrims in organised pilgrimages (+50 % over 2007) and 131,278 young people in organised pilgrimages (+54 %). Another 67,670 were sick or disabled people.
Mr Franck DelaHaye, Promotion Director of Lourdes Tourism office, was in Bangkok last week along with a delegation of 10 French exhibitors, on a roadshow through Bangkok, Kuala Lumpur, Singapore and Jakarta. He says he is making up to three trips a year to Asia to develop the nascent market.
Angeline Tang, the Singapore-based Regional Marketing Manager for Atout France, the French national tourism organisation, says a number of tour operators are beginning to specialise in pilgrimage tourism in Southeast Asia.
About 41% of the organised pilgrims to Lourdes are from France itself, followed by Italy and Spain. In 2008, a mere 17,158 organised pilgrims came from South Asia (mainly India), 1,147 from the “Near East” which includes Thailand, and 607 from Oceania. However, Mr Delahaye says that it is precisely because the base numbers are small that the potential for growth is high.
Pope Benedict’s visit last September gave Lourdes a particular fillip with an estimated 300,000 pilgrims tabulated over the three-day period.
Visitors stay an average of three days. The city boasts 220 souvenir shops and now claims to be “France’s 2nd hostelry city” with 208 hotels (26,000 beds), six tourist residences, (462 apartments) and 11 campsites (2,407 beds).
Most of the visits take place between April-October when the Lourdes railway station sees a throughput of roughly 1.2 million passengers with nearly 700,000 pilgrims. It also boasts a special pavilion which was renovated in 2000 to allow the sick to be taken care of from the time they leave the train until their transfer to the hospitals and other specialised centres.
The city’s tourist literature says, “It is interesting to see how, for 150 years, Lourdes has been communicating the need to drink at the Massabielle Source. Based on the quest of the Miracle in the late 19th century, the hope of healing is still alive today.”
It says the city has survived social changes, industrialisation, major conflicts and economic crises. In fact, it adds, “the wars have strengthened the spiritual needs that are intrinsic to human nature. Lourdes has lived all these stages, and has kept its place at the heart of suffering. It has always been a source of hope.”
Another social change has been the “neglect of religious practices” and the subsequent “lack of priests in the whole of Western Europe.” That has meant re-inventing itself away from just religious and spiritual visits to attracting regular tourists based on a message of “the coming together of different cultures.”
The brochure says that today people “have less of a sense of belonging, we socialise differently, the employment market is undergoing transformation. Thus access to culture, leisure, sports and relaxation activities has been modified. We are living in an individualistic era. Spiritual quest, too, has modified practices: energy-seeking, peace of mind and self-knowledge quests are emerging in the guise of new natural therapies.
“Lourdes is changing to a universal message accessible to all.”
Although the city has undergone significant upgrade, the visitor literature is refreshingly honest in terms of its shortcomings.
“Lourdes suffers from the confinement of a small town subjected to sprawling growth. The roads are not adapted to the millions of visitors. There is permanent conflict between pedestrians and vehicles, road traffic difficulties, and sometimes problems with complex parking arrangements.
“In order to improve the situation significantly and beyond the annual planning and maintenance programmes, the town council is reflecting on a new plan for urban development, taking into account pedestrians, every-day users, light vehicles, deliverers and big carriers. At the same time essential environmental factors are to be integrated.”
That will include dealing with another kind of fallout – in 2008, the city estimates 2.92 million candles were lit, weighing roughly 840 tons. No figures were available on the smoke emissions.
5. Destination Marketing With A DifferenceOctober 16, 2009 by Don Ross, Editor, TTR Weekly
CHIANG MAI, North Thailand -- Snappy slogans and high tech presentations are the usual hallmarks of national tourist organisations, so it’s refreshing to see something very different which may land on your desk sometime soon.
Hardly high tech, but highly effective, this marketing tool combines children’s art, photography and around 2000 words of promotional text in a beautiful presentation. It’s placed in a medium that has it travel all over the world free of charge. That means no distribution expenses. The unit cost is low, and its effect lasts for 14 months – a desirable formula.
Its uniqueness and absence of commercial content means it is welcomed everywhere – into travel agents, airlines, executive offices, embassies, government offices, and bedside tables. It’s talked about, and respected for its simple appeal. It gets mentioned in the press. It carries a huge amount of goodwill, it does a wonderful job of promoting Thailand, and it’s probably the only one of its kind in the world. On top of that, it’s donated over a million baht (about US$30,000) to needy kids. Destination marketing probably doesn’t come any better than this.
Nicknamed “Thailand’s Tourism Ambassador’ – a.k.a. the “Chiang Mai Charity Calendar” the useful 40-page A5 desk companion is the brainchild of Amari’s retired VP Marketing Basil McCall, and Malaysian colleague, Ramlah Jafri who do this voluntarily as a way of giving something back to their host country. Working from home in Chiang Mai, they finance the production and printing of 10,000 copies, doing the admin, accounting, sales, & deliveries themselves.
The 14-month desk calendar is sold for 100 Baht, and when costs are covered, the remainder is donated in full. No party receives any financial benefit. The 2008 and 2009 calendars combined raised a total of 1,027,000 Baht.
The third 2010 edition is just out, featuring 14 colourful paintings submitted by school students reflecting the theme “Nature & Culture of Northern Thailand” It’s a desirable desk-enhancer. In the words of Mark Whitman, of the Chiang Mai Mail, “The calendar from Chiang Mai is not just beautiful, but has a sense of spirituality and goodness about it that makes it a pleasure to look at”
Although the calendar is bought by residents and tourists, the really big marketing potential lies in the hands of hotels, travel agents and airlines who offer it as a meaningful gift to clients, journalists, incentive groups, agent educationals, First and Business Class passengers, and distribute it at trade shows. The calendar can be custom-made with a company message or product description on an integrated front cover, or printed on an extended base. Production takes only 2-3 weeks.
But many in the trade unfortunately mistake its role, saying things like: “Our business is not in Chiang Mai” “We have our own calendar” “No budget” or “We already donate enough”
“They miss the whole point” says Mr McCall. “Promoting Northern Thailand brings people come to Bangkok first, often ending up in a beach resort, so the benefit applies to all. And if a company makes its own calendar, ours can still be distributed to promote the destination – for example, it can be included in the cost of gala dinners or special events and presented as a gift to hotel guests, who love such a gesture. And even with tight budgets, if every tourism-related company buys just a small quantity to give away, the joint marketing effort will roll very fast – and that’s the beauty of it. Lastly, we’re not a charity – we simply give away the proceeds to disadvantaged kids who otherwise get absolutely nothing from tourism. Coupled with support and appreciation from the travel industry, that’s our reward”
Can destination marketing get any better than this? Is there anything more worthwhile for the Thai travel industry to support? Is there any other year-end giveaway in Thailand which better enhances the image of the company that chooses to offer it to their clients?
Members of the Thai travel trade can help their tourism industry by buying either just a few, or a few hundred. Not only will they be offering a delightful gift to their clients, they will simultaneously be giving a gift to needy children. And that’s a worthwhile conclusion to any marketing initiative.
Subscribers not based in Thailand who would like to receive this unique creation can have a copy sent by registered air mail through the calendar’s web site. Not only will you have a beautiful desk companion, you’ll be supporting a very worthwhile cause which Travel Impact Newswire endorses wholeheartedly. The organisers are known to me personally and I can vouch for their integrity and sincerity. The link is at: http://chiangmaicalendar2010.googlepages.com/overseas
6. European Tourism 2009 - Trends & Prospects (Q3/2009) – Signs of recovery, But At What Pace?Brussels , 19 October 2009. The European Travel Commission has just published its third quarterly report on European Tourism 2009 - Trends & Prospects. The following gives a brief overview of the report for the third quarter. The full report can be downloaded here.
Signs of recovery - but at what pace?This year has seen the worst economic recession since the 1930s and, although several key economies in Europe and other parts of the world started to register growth as early as the second quarter, the growth remains fragile. Households, companies and governments are all set to go through an extended period of balance-sheet rebuilding, so the recovery is likely to be very gradual. Global GDP growth next year is expected to be modest as a result, and a second dip into recession early in 2010 (as temporary effects unwind) cannot yet be ruled out.
Travel demand is stabilising
Travel demand fell significantly in the first half of 2009 and continued to decline in July and August. However the rate of decline slowed in the last two to three months, and demand for air transport and hotel accommodation also appears to be returning to levels comparable with that of 12 months ago – in volume, if not yet in value terms, since the recession has also driven down prices. International arrivals, which fell by 7% worldwide and by 8% in Europe in the first seven months of the year, according to the World Tourism Organization (UNWTO), are projected to stabilise over the last four months of 2009, perhaps ev en showing some growth, although this will be largely by comparison with the very depressed levels experienced in the second half of 2008.
and 2010 could see some tentative growthIn contrast to previous recoveries, there is not expected to be a strong rebound from this year’s low demand. A number of factors will continue to constrain growth, suggesting that recovery will be subdued. On the positive side, travel is not expected to fall any further in 2010, although significant downside risks remain – not least the prospect of an escalation in the A(H1N1) influenza outbreak. While the first wave of infections had only a limited impact and vaccination programmes are being implemented in many countries, a new, more serious outbreak still remains a risk.
but long-haul demand will remain constrainedThe downturn in travel and tourism in 2009 has been especially noticeable for long-haul travel, with a move towards increased short-haul travel and leisure trips of shorter duration. This trend is expected to continue in the short term – or until economic recovery is entrenched.
Europe could benefit from this trend as travel from intra-regional sources – the bulk of all demand – will tend to remain within the region. Eurozone markets will continue to benefit from the favourable exchange rates, but demand from dollar-based economies, hit by the ever-strengthening euro, will continue to suffer.
Source: Travel Impact Newswire [mailto:email@example.com]
By: Imtiaz Muqbil, Executive Editor, Travel Impact Newswire