07 October 2008

Recession is not the end of the world - CBI chief

The travel and tourism industry must not talk itself into thinking a recession is the Ã¢â¬Åâœend of the worldÃ¢â¬~.

That was the message to ABTA Travel Convention delegates from Confederation of British Industry president and chairman of British Airways Martin Broughton.

Giving the keynote address to the convention in Gran Canaria, he said the current economic downturn had come on the back of unbroken growth for more than a decade.

Ã¢â¬ÅâœThe sky hasn't fallen in on the British economy,Ã¢â¬~ Broughton suggested.

But he called for concerted action by governments to halt the downturn and suggested the UK would be bolstered by driving inflation down combined with subdued wage inflation. The CBI is calling for a half a point cut in interest rates this week.

Ã¢â¬ÅâœThings could be looking up by 2010 Ã¢â¬' that's what we call the benign scenario,Ã¢â¬~ Broughton told delegates.

However, he warned that with banks collectively acting like Ã¢â¬ÅâœlemmingsÃ¢â¬~ which was affecting lending the consumers, then there could be a malign scenario leading to longer recession that is Ã¢â¬Åâœcompletely unavoidableÃ¢â¬~.

Broughton pointed to emerging economies such as India, China and the Middle East as driving more tourists and was confident that many UK travel companies were adapting to the downturn.

Ã¢â¬ÅâœIt all points to plenty of rich pickings for British tour operators,Ã¢â¬~ he said.

And he joined calls for expansion in UK airport capacity, with new runways at Heathrow and Stansted, saying that planning rules needed overhauling to avoid a repeat of the 12-year planning process required before Terminal 5 at Heathrow gained approval.

Broughton advised travel companies to secure distinctive brand positioning in the current difficult economic environment.

He said consumers would feel more secure with brands that they know.

Ã¢â¬ÅâœThe way to succeed in the long term is to look after your customers,Ã¢â¬~ he advised.

by Phil Davies