The travel industry will not fully recover from the global economic slump until 2011 at the earliest, according to the latest predictions from the World Travel & Tourism Council (WTTC).
Unveiling its annual research results at ITB Berlin today, the council emphasised the importance of travel as a component of global economic growth over the past two decades, but also illustrated the impact of the recent recession on demand.
“As was the case with other sectors, travel was hit hard by the credit and housing market collapses last year; both of which triggered the deepest recession since the Great Depression,” said WTTC’s president Jean-Claude Baumgarten.
In a macroeconomic sense, world GDP fell by 2.1 per cent during 2009, with developed economies – a major source of demand for travel & tourism – the most severely affected. But behind these headline figures, individual households were forced to curtail leisure travel plans; often substituting lower-cost short-haul and domestic travel for more expensive long-haul trips.
Corporations also reduced business travel budgets, cutting demand further.
“Within the travel sector itself, investment plans were shelved or delayed,” added Mr Baumgarten, “even in some previously dynamic, expanding destinations.”
The A(H1N1) influenza pandemic also contributed to the reticence among travellers, generating panic in many markets.
As a result – and despite the resilience of some, notably Asian, emerging economies – activity and employment contracted across the sector. Some five million jobs were lost in 2009 alone, with global tourism GDP declining by 4.8 per cent overall.
235 million employed in Travel & Tourism worldwide, despite the downturn
Nevertheless, even in such a depressed year for activity, travel and tourism still employed over 235 million people across the world – 8.2 per cent of all employment – and generated 9.4 per cent of world GDP.
The global economy has now moved into a recovery phase, although the pick-up in developed economies is expected to be gradual as households, corporations and governments all battle to rebuild their balance sheets.
“Despite recent encouraging short-term indicators of tourism activity, the recovery in world travel and tourism is expected to be muted,” warned Mr Baumgarten. “Both firms and households will be examining travel plans carefully and continuing to limit expenditure.”
Spending in real terms is expected to increase by a mere one per cent in 2010 – while business travel spending will again decline, by nearly two per cent.
The recovery should gain momentum through 2010 and 2011
In the longer run, travel and tourism will sustain its leading role in driving global growth, creating jobs and alleviating poverty.
Emerging economies, in particular, are expected to be engines of growth, boosting international travel – with China alone set to provide almost 95 million visitors for other destinations by 2020 – and also generating an increasingly vibrant domestic travel sector.
“But developed economies will continue to dominate global travel and tourism for the foreseeable future,” continued Mr Baumgarten.
“While many are mature markets reaching a ceiling in terms of propensity to travel, a growing preference for, and priority focus on, leisure is expected to provide clients for new destinations once consumers fully regain confidence.”
Overall, the travel and tourism economy is forecast to grow by 4.4 per cent per annum in real terms between 2010 and 2020, supporting over 300 million jobs by 2020. This accounts for up to 9.2 per cent of all jobs and as much as 9.6 per cent of global GDP.