WTTC Results Show No Time For Rhetoric
Two difficult years in prospect...
Given the significant deterioration in Travel & Tourism activity through the second half of 2008 and the bleak macroeconomic forecast for 2009, WTTC's latest research shows that Travel & Tourism Economy GDP will contract by 3.6% in 2009. And it is expected to remain weak in 2010 with only marginal growth, of less than 0.3%, currently predicted - on what will already be a weak 2009.
"Lower fuel costs will make a difference," said Baumgarten, "as will lower general inflation, which should reverse part of last year's squeeze on households' spending power. But given how widespread and deep the current recession is, it is inevitable that Travel & Tourism will continue to be affected."
"Indeed, as a relatively cyclical industry, its contribution to world GDP is expected to fall further in the next two years - from 9.6% in 2008 to just over 9% in 2010," Oxford Economics' Managing Director, Adrian Cooper, added. "Job losses are likely to be significant, with employment falling by around 10 million over the next two years towards 215 million in 2010, before recovering thereafter."
A key message from WTTC is that Travel & Tourism is a major contributor to job creation and poverty alleviation - "a fact that policy-makers would do well to recognise and take into account in their short- to medium-term strategies," said Baumgarten.
Baumgarten stressed, "The industry is not expecting a bail-out. It needs a supportive framework from government to help it weather the current storm. And governments would also do well to recognise Travel & Tourism's potential to energise the economy once the current crisis eases."
... with investment and corporate travel predicted to be hit hardest
- Travel & Tourism investment and corporate travel are expected to be the hardest hit this year. Real investment spending is forecast to decline by 5% in 2009 and a further 1.25% in 2010.
- Residents' Travel & Tourism spending is likely to be the least affected, but even here a decline of 2.75% is projected for 2009, despite the substitution of domestic for some foreign travel.
- Travel & Tourism's contribution to GDP and jobs will still be positive longer term
"Nevertheless," said Baumgarten, "looking beyond the current crisis, Travel & Tourism is expected to resume its leading role in driving global growth, creating jobs and alleviating poverty.
"Emerging economies are expected to be the main engines of growth," Baumgarten added, "generating hundreds of millions of new travellers from among the growing middle classes in countries like China, India and Brazil - boosting international travel, but also creating an increasingly vibrant domestic tourism sector."
In developed countries, the increasing priority given to leisure activities can be expected to enhance demand for travel to existing and new tourism destinations once consumers regain confidence, while the popularity of short breaks - both domestic and international - will continue to expand in the medium to longer term.
Overall, the Travel & Tourism Economy is forecast to grow by 4% per annum in real terms over the next ten years. By 2019, Travel & Tourism will account for 275 million jobs, representing 8.4% of total employment across the world.
"This means that Travel & Tourism will continue growing in importance as one of the world's highest priority industries and employers," Baumgarten said.
The World Travel & Tourism Council (WTTC) is the forum for business leaders in the Travel & Tourism industry, working with governments and other stakeholders to raise awareness of the importance of one of the world's largest generators of wealth and employment. With Chairs and Chief Executives of the world's 100 foremost Travel & Tourism companies as its Members, WTTC has a unique mandate and overview on all matters related to Travel & Tourism.
Since it is a private sector body, WTTC's Members also have a private-sector culture - one which is very different from that inherent in public sector organisations. This explains why WTTC has chosen to adopt simulated Tourism Satellite Accounting as the basis for its annual economic research. This is the most reliable methodology for providing consistent and directly comparable information on Travel & Tourism's impact on economic activity and employment, in as timely a fashion as possible.
WTTC's economic impact research is a decision-making tool for economies that do not have the means to produce comprehensive Tourism Satellite Accounts (TSAs), yet need to have the best and most up-to-date information as quickly as possible to help determine and drive policy. Making estimates, assumptions and producing forecasts to inform policy discussions are an essential part of this research.
More work on TSA research is clearly a necessary, complementary exercise. WTTC's success in publicising and raising awareness of the possibilities provided by TSAs is a testament to its commitment to TSA development, and this is also reflected in the steady stream of National Tourism Administrations and other stakeholders which commission and use its economic impact research.
For further information on WTTC's latest research, which covers 181 countries around the world, please contact: Amir Girgis, WTTC's inhouse Economist - tel: +44 (0) 20 7481 8007, email: email@example.com - or email Regine Doloy, WTTC Communications Director, at firstname.lastname@example.org
Phone: + 44 20 7481 8007 .