Travel and tourism growth lower than expected

The global Travel & Tourism industry will grow more slowly in 2011 and 2012 than previously anticipated, the World Travel & Tourism Council (WTTC) announced today.

The WTTC forecast earlier in spring this year growth of 4.5% in 2011, followed by 5.1% in 2012, but following deterioration in global financial conditions, the eurozone debt crisis and the threat of a return to recession in the US, it now believes travel and tourism will grow only 3.2% and 3.3% in 2011 and 2012.

Its gloomier forecast came as the British Retail Consortium announced its members had seen an insignificant rise in sales in October, which were up 1.5% compared with October 2010. Online sales were up 11.5% on a year ago, but the consortium said it was braced for further high street casualties this month as more household names and leading corporations are suffering.

However, the WTTC said long-term prospects for the travel and tourism industry remain strong, as it believes year growth will hold steady at around 4% per year up to  2021. This is down marginally from the annual growth of 4.3% forecast in March 2011, with the reduction due almost entirely to the downward revisions to growth in 2011 and 2012.  

The latest economic data points to a slowdown in economic activity in the spring and summer of 2011. GDP growth in the USA is down from over 3% in the fourth quarter of 2010 to around 1.5% in the second quarter of 2011, with similar levels in the eurozone and growth as low as 0.5% in the UK in Q2 2011.

Nevertheless, latest Travel & Tourism indicators show that people are still travelling – with international air travel and hotel occupancy rates up.

However, while travel and tourism data for the first half of 2011 has been largely positive, continued concerns around the state of the economy – particularly in the US and Europe – mean that confidence levels are low.

"As the global economic recovery loses momentum and impacts industry performance, the outlook for travel and tourism will be weaker in the second half of the 2011 than it was in the first six months," it said.

David Scowsill, WTTC president and CEO David Scowsill growth of 3.2% this year would still be "a laudable achievement", which would rank the travel and tourism industry ahead of world GDP growth, expected to be 2.8%, and most developed countries.

The two big themes of 2012 are likely to be the rebound in tourism in the Middle East following the social upheaval of 2011 and the recovery of Japan, the world’s third largest travel and tourism economy, following the earthquake and tsunami, he said.

"Our latest report on Japan indicates that the recovery is occurring in line with our most optimistic scenario which states that the number of international tourist arrivals will recover by early 2012, along with a faster recovery in Japan’s own travel and tourism demand.

"Travel and tourism is predicted to account for 69 million more jobs by 2021, stimulating employment across the world, encouraging export-led growth of economies, and reducing poverty in developing economies.”