WTTC President & CEO calls for supportive policy framework to address the challenges of the current downturn for Travel & Tourism
"What started as a credit crunch in the USA has developed into a major financial and economic crisis that has spread rapidly to all four corners of the globe," he added. "And we clearly haven't seen the end of it yet."
Although there are many uncertainties as to how long the current crisis will continue, and how deep its impact will be on disposable incomes and business and consumer confidence in different markets, past experience has shown that Travel & Tourism always rebounds from cyclical downturns - sometimes even stronger than before.
"Moreover," Baumgarten noted, "although severe, this crisis cannot be compared with past crises due to events such as 9/11, SARS, or even the Gulf war. Today, people still want to travel and, once the recovery starts, there is likely to be huge pent-up demand."
In the meantime, the industry is by no means at a standstill as some would lead us to believe, Baumgarten said. Today's leaders of Travel & Tourism have been confronted by many challenging periods in the past, and they are used to making the most of enforced downturns to plan ahead for the future.
It will take some time to re-establish the balance between supply and demand, Baumgarten said, and it's going to be a very different world out there when we do see the end of the current crisis.
"But we know it will come," he added, "and we are confident that the long-term future of Travel & Tourism will be assured."
Nevertheless, the WTTC President & CEO had a few words of caution for the Travel & Tourism industry and governments.
"It is more critical than ever for the public and private sectors to work together in partnership to address the challenges and try to find solutions," he said. "This is one reason why we are taking our annual Global Travel & Tourism Summit to Santa Catarina in Brazil next year.
"As one of the BRIC countries, Brazil has huge potential for development - not least in Travel & Tourism - and it's clear that there is growing interest in Brazil's Travel & Tourism development from foreign private investors," Baumgarten noted. "In fact, we will be taking a group of private investors to Florianópolis, Santa Catarina's state capital, in the next few months."
Turning to the public sector representatives at the Forum, Baumgarten stressed that "this is no time for governments to see Travel & Tourism as a 'cash cow' - an easy source of much-needed revenues for the treasury's coffers."
Rather, he warned, governments should provide a supportive policy framework to help stimulate demand and ensure that Travel & Tourism continues to generate employment and alleviate poverty in emerging markets.
"In this way, it will be beneficial for everyone - destinations, host communities, the industry and consumers," Baumgarten said.
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