26 January 2010

Rebound in travel optimism claimed

More than three quarters of senior travel industry buyers claim to be optimistic for the prospects for the trade in 2010.

A poll of members of World Travel Market's Meridian Club, the business club for the travel industry's most senior buyers, found that 84% are showing optimism.

More than six out of ten of the 659 senior buyers surveyed say the industry will perform better in 2010 than in 2009, with a further 33% believing the industry performance will be on a par with last year.

Six per cent fear 2010 will see the industry perform worse than it did in 2009.

Meridian Club members have even more confidence in their company's performance in 2010 with 92% stating they are optimistic about their organisation's performance this year.

Seven out of ten say they believe their company will perform better in 2010 than it did in 2009, with a further 27% expecting it to perform broadly the same as last year.

A minority of three per cent expect their organisation to perform worse in 2010 than it did in 2009.

Prior to the economic downturn the industry was expected to grow by four per cent in 2009, according to research by Euromonitor International unveiled at WTM.

But the industry shrank last year with the World Travel & Tourism Council stating the industry's global Gross Domestic Product declined by 3.6%.

Meridian Club marketing manager Mark Jakobsen said: "It is great news for the industry that it's most senior buyers expect it to bounce back this year.

"The global financial downturn has had a significant impact on a number of industries including travel and tourism.

"Consumer confidence is starting to recover and Meridian Club members say this is reflected in bookings so far in 2010 and are confident this will continue throughout the year."

by Phil Davies

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Unconvincing

The industry is pretty good at talking things up in the face of reality. So much depends upon the issue of consumer confidence that it is hardly surprising that trying to massage confidence appears to be a critical strategy. Who can blame one for that? I don't want to rain on the industry leaders' confidence parade, but count me out (though I hope I might eat my words in a year's time!): we have had the first full calendar year since the crisis hit and we have yet to see company results for 2009...and I fear that the impact of poor figures may damage even further the parlous state of confidence in the market. One can survive crisis for a while - live with a few months of crisis in the balance sheet, but cut-backs and cross-funding, delaying reinvestments etc cannot last indefinately. I listened to a Harvard economist who (perhaps quite correctly) said that the THIRD year of recession/downturn is usually the killer: - In Y1 the crisis cuts in half way through the financial year and things don't look altogether too bad. - In Y2 companies try alternative strategies, cutbacks and cut things to the bone to survive hoping it will soon 'come right', but the depth of the problem shows in the bottom line. - In Y3 if it hasn't 'come right' then the resources to continue to 'hold on' become scarce indeed and non-existent for those without cross-funding possibilities, institutional backing and robust and creative strategies. I hate to rock the boat, but I don't think we've seen anything yet - certainly not the proverbial 'green shoots of recovery'. I do accept that some clouds have silver linings and that certain sectors or operators will gain. For example in my region of France 2009 saw a dive in hotel occupancy figures but gite/self-catering accommodation produced a rise as families and groups sought cheaper alternatives. The same perhaps will go for low cost providers. That said, I don't think the industry is anything like being close to being 'out of the woods'. I am not even sure Churchill's '... Not the end, not even the beginning of the end...but perhaps the end of the beginning' can be held to apply presently. Sorry guys: count me an unbeliever in unsupported optimism. I need compelling evidence and I don't see it on the horizon yet. Time, as ever, will tell....

By Tony Jolley, Tuesday, January 26, 2010