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Confidence in Tourism Sector Gradually Picking UpNovember 6, 2009 By: Staff
The decline in international tourism may have started to bottom out, according to the latest edition of the United Nations World Tourism Oragnizations's (UNWTO) World Tourism Barometer. Worldwide, international tourist arrivals declined by 7 percent between January and August 2009, but the rate of decline has eased in the past few months. These results, as well as the most recent economic data, confirm UNWTO's initial forecast of a 5 percent decline in international tourist arrivals for the full year 2009. For 2010, UNWTO expects a moderate growth.
Decline in International Tourism Easing in Recent Months
International tourist arrivals worldwide are estimated to have declined by 7 percent between January and August 2009. Destinations worldwide recorded a total of 600 million arrivals, down from 643 million in the same period of 2008.
Nevertheless, the downward trend that started in September last year may have begun to bottom out. Arrivals in the two high-season months of July and August declined by 3% compared with a decrease of 8 percent in the first half of the year, and data available for September points to a continuation of this upward trend.
The UNWTO Confidence Index is also improving after two periods at a historic low. The more than 330 experts surveyed worldwide by UNWTO confirm that confidence is picking up. In the latest survey, the percentage of experts with a negative outlook for the next four months has decreased from 62 percent to 42 percent while, for 30 percent of experts, prospects are 'equal', and for 28 percent they are "better" or "much better."
"Throughout this year, the world’s tourism industry was faced with a large number of challenges, led by the global economic crisis, the credit crunch and rising unemployment, not to mention the influenza pandemic," said UNWTO Secretary-General a.i. Taleb Rifai. "Seldom in recorded tourism history has the industry had to contend with so many different issues at the same time. However, the negative trend that emerged during the second half of 2008 and intensified in 2009 is starting to show signs of receding."
Tourism Earnings Suffer Somewhat More than Arrivals
Within the aim of offering closer market monitoring during these challenging times, this is the first time UNWTO presents an estimate on international tourism receipts for the current year.
As experienced in previous crises, tourism earnings have suffered somewhat more than arrivals as consumers tend to trade down, stay closer to home and travel for shorter periods of time. Receipts from international tourism are estimated to have contracted in real terms by 9 percent to 10 percent in the first six months of 2009, i.e. 1 to 2 percentage points below the decline in international arrivals during that period (-8 percent).
Results for the first eight months of 2009 show that international tourist arrivals declined in all world regions, except in Africa, which bucked the global trend. Europe, the Middle East and the Americas were the hardest hit:
o In Europe (-8 percent), destinations in Central and Eastern Europe were the most affected, but results for all other subregions were close to the average.
o Asia and the Pacific (-5 percent) shows the clearest signs of improvement with growth already positive in August driven by the encouraging results of North-East Asia.
o In the Americas (-7 percent) there are still no clear signs of a reversal in the current decline trend. Growth continued to be fairly negative during the second quarter as well as in the months of July and August. South America has shown the best performance so far (-1 percent).
o The Middle East (-8 percent), though still well down on the growth levels of previous years, already saw a shift to positive growth between June and September (data for the region is fairly volatile due to the influence of major religious events in tourism flows).
o Africa’s growth (+4 percent) was very positive given the current difficult environment.
Moderate Recovery Forecast for 2010
The softening in the rate of decline seen in the last months is expected to continue during the remainder of the year. As this is in line with the UNWTO’s initial projection, for the full year the forecast for international tourist arrivals is maintained at between -6 percent to -4 percent.
Given the high level of correlation between arrivals’ and receipts’ growth, for the whole of 2009 receipts are expected to decrease by 6 to 8 percent.
UNWTO’s initial forecast for 2010 indicates that international tourist arrivals are likely to witness a moderate recovery next year, with growth at +1 percent to +3 percent. This outlook reflects the gradual improvement of international tourism figures in recent months, as well as the better-than-expected economic indicators in some major source markets.
Asia will show the strongest rebound, while Europe and the Americas will probably take longer to recover. Africa is forecast to continue in positive territory as in 2009, with an extra boost from the 2010 FIFA World Cup in South Africa. Growth is also expected to return to the Middle East.
The end of the recession in a number of key markets is welcome news. But 2010 will still be a difficult year. The risks associated with the A(H1N1) influenza virus remain on the horizon and the pace of economic recovery is expected to be modest. The IMF projects economic growth worldwide at +3.1 percent, but this will still be fairly sluggish for advanced economies (+1.3 percent) and stronger for emerging ones (+5.1 percent). Unemployment, as a lagging indicator, is still expected to increase in many countries this year and throughout 2010. Stimulus measures are likely to be phased out and, in a number of advanced economies, potential increases in taxation may put extra pressure on household budgets. On the positive side, consumer confidence is giving signs of picking up, and interest rates and inflation are expected to remain at low levels.
These results, as well as the outcome of the UNWTO Minister’s Summit on 'The Roadmap for Recovery: Sustainable Tourism in Challenging Times', will be presented in detail during the UNWTO Press Conference to be held at the World Travel Market on November 10.