WTTC predicts a flat year in 2010 in terms of travel and tourism growth
The launch of the World Travel & Tourism Council’s (WTTC) annual economic impact research at ITB is expected to confirm a five per cent decline in travel and tourism economy GDP in 2009 and 2010 will be a flat year, according to the council’s president and CEO, Jean-Claude Baumgarten.
The Middle East is not likely to fare any better either, although the travel and tourism economy contributes more than 10 per cent to total GDP in the region – one percentage point higher than for the world overall.
In terms of jobs, the picture is again a flat one for 2010, but this follows a two per cent decline over the sector’s peak year, 2008. Nevertheless, despite the global economic recession, the sector still generated 235 million jobs worldwide.
In the Middle East, the total number of jobs in the travel and tourism economy is projected to reach 5.3 million this year, up a modest two per cent, accounting for a 9.6 per cent share of total employment in the region.
Following the much publicised problems in Dubai over the past months, WTTC’s new research indicators for investment will come as a warning sign to the region’s travel and tourism sector. While capital investment worldwide is expected to fall by just two per cent this year, the Middle East is forecast to see a decline of more than 12 per cent.
“Travel and tourism has received very little government support since the beginning of the global economic crisis, despite its significant contribution to GDP, employment and investment,” said Baumgarten. “Think of all the support that has gone to the financial sector, even though its share of GDP is not that much larger.
“But this situation clearly cannot continue in the long term if the sector is to realise its long-term potential as a major generator of employment, driving global growth and alleviating poverty – especially in developing countries where it has a relatively high level of labour productivity.”
WTTC strongly maintains that it is crucial for government policy to support rather than hamper long-term development of travel and tourism. And this means that policymakers need to be wary about placing extra burdens on this previously-dynamic sector at this crucial time, when profitability is already under severe pressure.
“If governments ensure an operating environment that is conducive to business, the Middle East will see a strong recovery in travel and tourism demand over the next 10 years,” said Baumgarten “and this will stimulate a recovery in investment, resulting in an annual growth of six per cent for the Middle East between now and 2020.”
Travel and tourism economy GDP is the broadest measure of the economic contribution of the travel and tourism sector to gross domestic product. It records the activity of traditional travel and tourism providers such as lodging and transportation plus tourism-related investment, public spending and export of goods.
The WTTC will announce the full findings of its economic impact research at 2pm on March 11 in the ICC Lounge.