Air industry could take three years to return to normal – report

Air travel is expected to take three years to recover to pre-recession levels of 2007 while the hotel sector could take four years, Euromonitor International has warned.


The market analysis provider’s latest report, revealed today at the WTM Vision Conference and based on statistics up to April this year, has revised forecasts it made last summer as a result of the contraction in the global economy.


It claims the worldwide travel and tourism industry will in fact shrink this year, instead of growing by 4%, as it originally predicted, although a slight recovery will start as early as next year.


Hotels were predicted to grow by 4.8% this year but that sector is now expected to decline by 3.6%, while air travel will decline by 2.3% instead of growing by 5.3%.


Euromonitor International global travel and tourism manager Caroline Bremner said: “People are shifting down from 5-star hotels for example to four-star. The larger chains can fall back on their mid-market, budget or boutique brands, which is helping them.”


The report forecasts a slight recovery in the global travel industry next year, but the growth will be far behind pre-recession forecasts. For hotels, 2010 is expected to see growth of 0.8% (instead of the originally forecast 5%) and flights 1% instead of 5.2%. Global departures will grow by 1.8% rather than 5.4%, and arrivals by 2.2% instead of 5.9%.


While western Europe is likely to see the green shoots of recovery from next year, the reports warns the north America market will take until 2011 to start its recovery.


Separate analysis by the World Travel and Tourism Council – which has also been forced to revise its original forecasts – predicts a contraction in travel and tourism gross domestic product of 3.5% this year and next, with growth of just 0.25% in 2010.


This compares to annual growth in the global tourism industry of 3.6% annually for the last four years, said WTTC economist Amir Girgis, speaking at the WTM Vision Conference.


However, Girgis predicted a return to levels of 4% growth between 2010-2019, with the Middle East and China markets leading the bounce-back.


“Tourists globally start changing their perceptions of travel the minute they can afford it. Once we get out of the current crisis, the long-term prospects are looking very good and healthy,” he said.


But The Co-operative Travel managing director Mike Greenacre said he feared the impact of rises in air passenger duty on UK outbound travel, particularly from next year. “It’s going to have a massive impact on longhaul destinations,” he said.


Girgis admitted the UK government was “adding obstacles” to the recovery of the UK travel market. “We would love to see this abolished,” he added.

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