Global credit crunch to have ‘moderate impact’ on travel

The travel industry will only be “moderately impacted” by repercussions from the ongoing global credit crunch, according to the World Travel & Tourism Council.

The WTTC signalled continued growth rates for the sector in 2008 but at a reduced pace.

Data from the organisation showed that international tourism arrivals increased last year by nearly six per cent over 2006 to nearly 900 million tourists. It was the fourth successive year that arrivals’ growth has exceeded a long-standing trend of four per cent.

The research also indicated that tourism spending per capita more than matched these increases. International air passenger traffic also rose at a record 9.3 per cent from year to year in November.

Looking forward, the WTTC admitted the travel and tourism industry faces “challenges” in the year ahead.

“The deteriorating economic conditions, particularly in the housing and credit markets across the globe are increasing concerns for the industry.

“However, the slowdown is likely to have a limited impact, due to the growth of emerging markets and the easing in monetary policy by central banks,” according to the organisation.

Higher energy prices are a two pronged challenge as they squeeze household budgets globally and raise the cost of a key input for the industry.

WTTC President Jean-Claude Baumgarten claimed that even this challenge had a positive angle, explaining how “higher revenues are boosting oil producer’ incomes and raising available funds for investment in diversification projects often focussing on tourism’s undoubted potential.”

He added: “Tourism growth has been particularly rapid in developing countries with the fastest average growth in tourism arrivals in the Middle East region.

“These countries are not only recognising the development potential of travel and tourism and therefore investing heavily in new infrastructure and facilities but their citizens are also seeing rapid economic growth boost their incomes beyond the level where international travel becomes both a feasible and desired option.”

The WTTC is holding its eighth annual global travel and tourism summit in Dubai on April 20-22.

Dubai Department of Tourism & Commerce Marketing director general Khalid Bin Sulayem said that “a continued policy for tourism has helped Dubai’s travel and tourism industry accelerate and this growth will help it also rise above the potential economic downturn”.

by Phil Davies