Economic meltdown costs 5m travel jobs
Wednesday, 12 Mar, 2010
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Almost five million jobs in travel and tourism were lost last year due to the global economic meltdown.
And the forecast for recovery is “muted,” according to the World Travel & Tourism Council, which released its annual research results at ITB in Berlin.
While world GDP fell by 2.1% in real terms, travel and tourism GDP was down by 4.8% last year, leading to the job cuts which amount to 5.6 million since 2008.
Travel and tourism investment dropped by more than 12% in 2009. Only spending on domestic trips increased, but by a marginal 0.7%.
Investment in the sector is forecast to decline for the second consecutive year in 2010, by 1.7%.
This means that travel and tourism GDP will grow by just 0.5% this year, meaning true recovery will not come until 2011.
Stronger momentum in the second half of 2010 and into 2011 will boost growth next year to 3.2%, the WTTC predicts.
The overall travel and tourism economy is forecast to grow by 4.4% a year in real terms over the next decade, supporting more than 300 million jobs – up from 235 million, according to the WTTC.
The engines of growth for international travel will be emerging economies such as China which is forecast to provide a massive 95 million travellers to other destinations by 2020 in addition to generating more domestic travel.
India and Brazil have also been pointpointed as huge new providers of travellers.
WTTC president and CEO Jean Claude Beaumgarten told TravelMole that these emerging nations with strong economies will help stabise the sector over the course of the next decade.
"All of a sudden a new force of dynamics is building up which will stablise everything," he said. "There is fantastic potential which leads us to be optimistic for the medium to long term."
The popularity of domestic and international short breaks will continue to increase, the WTTC believes.
Beaumgarten said the economic crisis forced investment plans to be delayed or shelved altogether even in some previously dynamic, expanding destinations. Last year’s swine flu outbreak in Mexico also “instilled a fear of travel” in many countries.
“Despite recent encouraging short-term indicators of tourism activity, the recovery in world travel and tourism is expected to be muted with both firms and households examining travel plans carefully and continuing to limit expenditure,” he said.
“Spending in real terms is expected to increase by a mere one per cent – while business travel spending will again decline, by nearly two per cent.”
While many mature markets are reaching a ceiling in terms of propensity to travel, a growing preference for leisure is expected to provide clients for new destinations once consumers fully regain confidence, Beaumgarten added.
“The popularity of short breaks – both domestic and international – will continue to increase. And innovation by the travel and tourism industry will create new products and markets.”
by Phil Davies
Phil Davies
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