17 June 2009

Light at the end of the tunnel for travel industry?

TravelMole Guest Opinion by World Travel Market chairman Fiona Jeffery

The travel industry’s immediate future was the key topic of conversation at the recent inaugural WTM Vision Conference.

The conference kicked off with exclusive research from Euromonitor International which focused on the impact the worldwide financial downturn has had on the travel and tourism industry.

Depending on your disposition The Forecast Restatement - Travel and Tourism in a Crisis’ findings revealed either a gloomy or optimistic picture.

Yes the recession has had a serious impact on the immediate future of the industry with it shrinking in 2009, when 2008 pre-recession analysis predicted a 4% increase.

However, there does appear to be light at the end of the tunnel for the industry with a predicted return to growth - around 2% - in 2010.

This is way down on 2008 forecast, which reached as high as 5.9%, but does illustrate improving times ahead for the travel and tourism industry.

Despite this potential positive forecast the current difficult trading conditions are clearly having an impact on the morale of the sector, with a show of delegate hands indicating the vast majority believe 2010 will be no better than this year.

I guess this is no surprise with WTM Vision delegates also being told hotels have cut prices back to 2004 levels to revive flagging interest and prices may not recover to 2008 levels until at least 2011.

While The Co-operative Travel managing director Mike Greenacre also fears the impact the increase in Air Passenger Duty, which is introduced on flight bookings from this November, will have on next year’s UK outbound tourism numbers.

In such uncertain times, investment in the future of your business can often drop down the agenda as you focus on getting enough business to survive today.

However, a key theme to come out of the WTM Vision Conference is the need for all businesses - especially tourist boards - to invest in marketing and promotion.

Speaker after speaker urged the industry not to sacrifice its marketing and promotion for the long term good of the travel and tourism industry.

Carnival UK chief commercial officer Peter Shanks led the way by praising tourist boards such as Australia and Barbados for continuing to promote themselves during this downturn.

"If you promote yourself when times are tough you will get the business," he said.

Eurostar UK and international sales and marketing director Emma Harris revealed the stark impact pulling a marketing campaign can have on an organistion.

She said Eurostar’s bookings dipped significantly after they dropped all advertising following a fire in the Channel Tunnel last September.

"Since we started again in February the effect has been huge," she said. "All the research will tell you any brand that stops investing in a recession will take longer to recover, if at all."

With these thoughts in mind I would urge the whole travel and tourism industry not to waste this current crisis.

It’s a brilliant opportunity to tackle the important things you would otherwise have left on the shelf and to look at problems with a fresh and even more radical perspective.

As I’ve previously touched upon, such an approach can be a difficult one to adopt, especially as companies tend to bunker down and take very inward perspectives

However, if the travel and tourism adopted such an attitude the industry as a whole will be in far better shape to fight the current financial downturn and fir for purpose to prosper during the next growth cycle.