Monday, October 20, 2008

Tourism and the Financial Crisis - 84th Session of the Executive Council of UNWTO Madrid 15 October 2008

UNWTO’s Executive Council (Madrid 14-15 October) agrees to create a “Resilience Committee” to support its Members with accurate economic analysis and response mechanisms. The tourism sector is suffering from reduced consumer demand – business and leisure – and tourism businesses are already feeling the credit crunch.

International tourism registered solid growth in the first half of 2008 – at around 5% between January and April, compared to the same period of 2007. The slowdown began with the summer holidays in the northern hemisphere.

The Panel of Experts of the UNWTO World Tourism Barometer, which up until then maintained favourable views of the sector's situation, now shows a perceptible loss of confidence regarding the short-term outlook.

Addressing the Executive Council, UNWTO Secretary-General Francesco Frangialli said that “Experience teaches us that tourism is resilient, but there is no denying that there is a certain stage of deterioration of the situation beyond which tourism too will begin to suffer.”

Early in 2008 signs of en economic downturn emerged. Although demand still produced solid growth figures in that period, UNWTO commissioned a study of the impacts of economic scenarios on the sector. An outline of “Global Imbalances and Structural Change in World Tourism” was discussed during the Executive Council:

* The economic shocks and crisis of the current year.
* Analyzing of the impacts on world tourism.
* Identifying key factors of change.

In considering these matters, the Members the UNWTO Executive Council confirmed the deterioration in their own markets, while maintaining the long-term confidence in the resilience of the tourism sector.

The challenge lies ahead – late 2008 and the first half of 2009, when the economic slowdown is expected to be more widely felt and consumers might decide to cut back further on their travel expenditures. The Executive Council therefore agreed:

* To create of a Resilience Committee open to all of its public and private sector Members.
* To support this work with state of the art information with special focus on air transport and major origin markets.
* To provide its Members with ICT-based up-to-date information on these impacts and emerging response initiatives.

Source: World Tourism Organisation

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