21 October 2009

No strong European travel rebound Ã¢â¬' report

There is unlikely to be a strong rebound from this year's low travel demand following the worst economic recession since the 1930s, the European Travel Commission warns.

A number of factors will continue to constrain growth, suggesting that recovery will be subdued.

However, travel is not expected to fall any further in 2010, although significant downside risks remain - not least the prospect of an escalation in the swine flu outbreak, according to the ETC’s third quarterly report on European Tourism 2009 - Trends & Prospects.

"While the first wave of infections had only a limited impact and vaccination programmes are being implemented in many countries, a new, more serious outbreak still remains a risk," the report said.

The downturn in travel and tourism in 2009 has been especially noticeable for long-haul travel, with a move towards increased short-haul trips and leisure trips of shorter duration.

This trend is expected to continue in the short term - or until economic recovery is entrenched.

Europe could benefit from this trend as travel from intra-regional sources - the bulk of all demand - will tend to remain within the region, according to the report.

"Euro zone markets will continue to benefit from the favourable exchange rates, but demand from dollar-based economies, hit by the ever-strengthening euro, will continue to suffer."

International arrivals, which fell by 7% worldwide and by 8% in Europe in the first seven months of the year, are projected to stabilise over the last four months of 2009.

Travel demand fell significantly in the first half of 2009 and continued to decline in July and August.

The rate of decline slowed in the last two to three months, and demand for air transport and hotel accommodation also appears to be returning to levels comparable with that of 12 months ago - in volume, if not yet in value terms, since the recession has also driven down prices, according to the report.

by Phil Davies