WTTC Unveils Tourism Economic Forecast at ITB Berlin

The World Travel & Tourism Council (WTTC) revealed the results of its 2009 Economic Impact Research at its annual ITB Berlin press conference in the presence of industry leaders from different sectors of travel and tourism –high-level government representatives, and its research partner Oxford Economics.

“This year, the task of assessing travel and tourism trends and drawing up forecasts has been more challenging than ever because of all the uncertainties,” said Jean-Claude Baumgarten, WTTC president and CEO.

Given the significant deterioration in travel and tourism activity through the second half of 2008 and the bleak macroeconomic forecast for 2009, WTTC’s latest research shows that the travel and tourism economy GDP will contract by 3.6 percent in 2009. And it is expected to remain weak in 2010 with only marginal growth –less than 0.3 percent, currently predicted- on what will already be a weak 2009.

“Lower fuel costs will make a difference,” said Baumgarten, “as will lower general inflation, which should reverse part of last year’s squeeze on households’ spending power. But given how widespread and deep the current recession is, it is inevitable that travel and tourism will continue to be affected.”

“The industry is not expecting a bailout,” Baumgarten said. “It needs a supportive framework from government to help it weather the current storm. And governments would also do well to recognize travel and tourism’s potential to energize the economy once the current crisis eases.”

Travel and tourism investment and corporate travel are expected to be the hardest hit this year. Real investment spending is forecast to decline by 5 percent in 2009 and a further 1.25 percent in 2010.

“Emerging economies are expected to be the main engines of growth, generating hundreds of millions of new travelers from among the growing middle classes in countries like China, India and Brazil –boosting international travel, but also creating an increasingly vibrant domestic tourism sector,” said Baumgarten.

In developed countries, the increasing priority given to leisure activities can be expected to enhance demand for travel to existing and new tourism destinations once consumers regain confidence, while the popularity of short breaks- both domestic and international –will continue to expand in the medium to longer term.

Overall, the travel and tourism economy is forecast to grow by 4 percent per annum in real terms over the next 10 years. By 2019, travel and tourism will account for 275 million jobs, representing 8.4 percent of total employment across the world.