“Is it crunch time for the Gulf travel industry?”
It does not take a Nostradamus to predict that 2008 is probably going to turn out to be the worst year ever for the world’s tourism industry.
The small bunch of stockbrokers in New York and London working the commodities including oil prices for their million dollar bonuses are threatening the very lifeblood of the tourism trade around the globe.
Several low-cost carriers and charter companies have already gone bust, more will no doubt follow and thousands will lose their jobs. Yet, it appears that the greed of the speculators, showing the unacceptable face of rampant capitalism, continues to rule the markets.
Of course, the Gulf tourism is not immune to the trends, despite some lofty comments from insiders in the travel industry.
The fact is that Europeans, Australians, Americans, Asians, Africans are all being affected by the price of oil.
Let’s look at the boom in property as an example. With house prices falling dramatically in the UK, petrol prices skyrocketing, the second mortgage market, which enabled many people to buy second homes, is drying up very fast.
This means that properties being sold in places like Dubai and Bahrain will initially rely on residents seeking homes to maintain the housing market, but sooner or later, unless oil prices start to assume a more reasonable level, there will be an impact in this sector of countries’ economies.
Cyprus property sales in the UK market are already suffering. Several American airlines are offering early retirement packages to staff in order to try to avoid dismissals.
Airlines have begun to cut travel agent’s commissions... nice to know, we are helping to augment the million dollar bonuses of the speculators!
But where is the turning point? At what stage do tourists say “I deserve a vacation, I always take a holiday, but this year, I cannot afford one, I’ll stay at home”.
Everybody working in the travel business in the Gulf region are keeping their fingers crossed and hoping that many tourists are going to say “I deserve a vacation - and come what may, I am going to take one!”
Special holiday packages and offers have already been devised by hotels and airlines, national tourism associations are doing their very best to ensure their products are competitive, but it is crunch time.
Can faraway places like the Arabian Gulf destinations compete with the home markets of Europe, Australia and the USA in troubled times like these?
Nearby India and the Mediterranean countries are already anticipating a lull and advertising their products and destinations to Gulf nationals and resident expats.
From an airline point of view, this is no time for the faint-hearted. Some routes will be dropped, new destinations postponed, belts tightened...the glory years will be forgotten overnight.
But there is light at the end of the tunnel. Most experts agree that the present oil prices are unsustainable. And if we listen to the old-timers in the travel industry, there is still an air of confidence.
They are saying “The dollar will strengthen, more oil will be pumped and the punters will always need a vacation, especially in worrying economic times. They’ll need some tender loving care, but they will come. There is too much investment in tourism facilities and infrastructure in the Gulf for the governments to, allow the travel industry to die on its feet, before it has even got really started “properly”.
Let’s hope, the old-timers are right. Fingers crossed!
Speaking Out by Jonna Simon