Travel industry growth to outpace world economy, says WTTC

By Ian Taylor | 24 March 2015 at 08.23 GMT
The travel industry will grow faster than the global economy this year, according to the latest World Travel and Tourism Council (WTTC) forecast.

The WTTC’s annual economic impact assessment predicts travel and tourism will grow by 3.7% worldwide this year against a global economic growth forecast of 2.9%.

The Council forecasts the sector’s total contribution to the world economy will reach $7,860 billion or 10% of global GDP, up by $280 billion on 2014, and travel will account for 9.5% of all jobs in the world “once all direct, indirect and induced impacts” are included.

The industry accounted for 277 million jobs worldwide last year, according to WTTC estimates.

WTTC president and chief executive David Scowsill (pictured) said: “Travel and tourism continues to grow faster than the global economy and is an enduring source of job creation and a driver of growth for every region in the world.”

He added: “The sector has recorded strong economic growth in 19 of the last 20 years, providing much-needed economic stability at a time of global economic volatility.

“Governments looking for a sector which can create jobs and drive economic growth should focus on travel and tourism.”

But Scowsill noted: “This industry requires the right regulatory environment in which to flourish, along with progressive policies on visa access, taxation, human resources planning, and sustainability.”

In an interview with Travel Weekly, Scowsill hit out at the UK government for failing to address these issues.

He said: “The UK is not a good example of managing the sector.”

The WTTC estimates the US and China as the two biggest travel and tourism economies in the world, with Germany now in third place, having overtaken Japan, and the UK in fifth.

The Council expects Russia to be the only G20 country to register a decline in travel and tourism growth this year, due to sanctions imposed by the US and European Union over the Ukraine.

The WTTC forecasts South Asia will see the highest travel and tourism growth in 2015 at 6.9% year on year, against growth in Europe of 2.4%.

However, Scowsill said: “The long-term prospects for our sector are very encouraging.

“Travel and tourism will continue to grow faster than the global economy and most other major industries.”

Sourced from Travel Weekly


UK policy failures put travel growth at risk

By Ian Taylor | 24 March 2015 at 08.30 GMT
The World Travel and Tourism Council (WTTC) urged the UK government “not to lose focus” on travel and tourism after forecasting the sector would grow by 4% this year in Britain, outpacing growth in the economy as a whole.

The WTTC published its annual economic impact assessment today, predicting UK travel and tourism would raise its contribution to GDP by 4% this year against forecast economic growth of 2.9%.

The Council put UK jobs growth in travel and tourism at 2%.

The WTTC estimates the industry contributed almost £188 billion to UK GDP in 2014 and accounted for 4.2 million jobs when “indirect and induced impacts” are included alongside the direct impact on the economy.

But the GDP contribution could increase to £195 billion by the end of 2015 or “almost 11% of UK GDP and 13% of total employment”.

However, WTTC president and chief executive David Scowsill warned Britain could lose its position as the world’s fifth-largest travel and tourism economy without government action.

He urged the next government “to take three major steps” to ensure the sector continues to grow.

Scowsill said: “First, there is a need to make visa applications easier, particularly for high-spending Chinese travellers.

“Second, the Air Passenger Duty (APD) tax, which remains among the highest in the world, must be reformed.

“Third, a decision must be taken quickly on addressing the chronic under-supply of airport capacity in the South East.”

The WTTC further warned the UK sector could employ 352,000 fewer people and contribute £17 billion less in GDP over the next 10 years if the government and industry fail to implement policies to recruit and manage talent.

WTTC research suggests the UK’s travel and tourism sector faces a major human-resource challenge and severe skills shortage by 2024.

Scowsill said: “Travel and tourism has the potential to contribute five million jobs to the British economy by 2025.

“However, this growth will not happen by itself. It needs progressive and coordinated government policies across the sector.”

The WTTC report Global Talent Trends and Issues for the Travel and Tourism Sector can be found here:

Sourced from Travel Weekly

WTTC accuses UK government of inhibiting tourism

WTTC accuses UK government of inhibiting tourismBy Phil Davies
Government policies are inhibiting the UK’s competitive position, the World Travel & Tourism Council warns on the eve of today’s Budget.The UK is “squeezing the economic opportunity” presented by travel and tourism and needs to “significantly change” its approach and policies.

The WTTC wants to see a freeze in the rate of Air Passenger Duty and the UK to align its procedures with the Schengen visa area to simplify access for inbound travellers.

The direct contribution to GDP from travel and tourism will slow this year to 2.5% after having grown by 3.4% in 2013, the organisation warns in its 2014 Economic Impact Report for the UK, published today (Wednesday).

The research shows that the sector directly contributed 3.5% to the UK economy last year and made up 10.5% of the economy when its wider supply chain benefits are included.

Travel and tourism contributed $7 trillion to the global economy – supporting 266 million jobs – and is expected to grow by 4.2% in 2014.

WTTC president and chief executive David Scowsill (pictured) said: “The UK is not taking the potential of travel and tourism seriously enough and is losing out on vital income and potentially hundreds of thousands of jobs at a time when creating employment opportunities for young people is vital.

“A composite of issues are contributing to a quelling of demand: Air Passenger Duty is the highest air tax in the world; the government has ruled out a lower VAT rate for hotels and restaurants; a lack of long-term planning in airport infrastructure; and restrictive visa policies.

“This means the UK is losing out on potential visitors to some of its European competitors, who are implementing more forward-thinking policies.”

He added: “Travel and tourism forecasts over the next ten years also look extremely favourable, with predicted growth rates of over 4% annually that continue to be higher than growth rates in other industries.

“Capitalising on the opportunities for this travel and tourism growth will, of course, require destinations and regional authorities, particularly those in emerging markets, to create favourable business climates for investment in the infrastructure and human resource support necessary to facilitate a successful and sustainable tourism industry.

“At the national level, governments can also do much to implement more open visa regimes and to employ intelligent rather than punitive taxation policies. If the right steps are taken, travel and tourism can be a true force for good.”

Sourced from Travel Weekly

Analysis: Asian capacity restrains tourism

Analysis: Asian capacity restrains tourismBy Ian Taylor

Infrastructure weaknesses will hinder how much the global travel industry can benefit from Asian growth. Ian Taylor reports from the WTTC Asia Summit in SeoulAsian travel and tourism, led by China, will grow faster than the rest of the world and outstrip global economic growth in the next decade.

But that won’t mean a vast increase in numbers of Chinese and other nationalities visiting the UK or a huge leap in long-haul visitors to China.

James Mueller, United Airlines vice-president for Atlantic and Pacific sales, told the World Travel & Tourism Council (WTTC) Asia Summit in Seoul last week: “There are capacity issues.” Mueller said China’s aviation infrastructure is not up to scratch despite an airport-building boom.

United recently won approval to begin flying to Chengdu in southwest China, and British Airways will begin flying there next week. Mueller said: “Chengdu’s infrastructure is remarkable. [But] the airports in Beijing and Shanghai need to improve.

He added: “China’s air traffic control does not allow us to operate the service we would like, although it’s worse for Chinese airlines. There is room for improvement.”

Mueller said there are increasingly fewer restrictions on regional air routes, but added: “There isn’t ‘open skies’ in China.”

China’s distance from Europe and the US will also limit the size of the air market. Mueller said: “The biggest challenge is the price of oil. It makes us careful about where we fly and with what aircraft. Most of the barriers to United in Asia are the distance. It’s just not economical [to fly].”

There are similar challenges in the cruise market. Carnival Asia chairman and chief executive Pier Luigi Foschi said of China: “Infrastructure is important but not sufficient. What we need is integration ­ of airports, roads and cruise terminals ­ so customers can find their luggage on a ship when they board. At the moment customers [in China] must carry their own luggage on to a ship.”

He added: “It’s not only about ports but about destinations. The Caribbean is not known for its cruise terminals but for its attractiveness as a destination, and there is work to do [on this] in China.” Carnival plans rapid expansion in the region. Foschi said: “Our expectation is to have 3.7 million Asians cruising by 2017 and seven million by 2020 -­ 20% of the world market.”

However, he said growth in Asia as a destination from the US and Europe would be limited. “People’s holidays tend to be short and Asia is a long-haul destination, so the first requirement is to educate people to spend longer [in the region].”

Adam Sacks, president of Tourism Economics, a division of Oxford Economics, told the summit that growth in Asian tourism would “border on the exponential”. However, domestic and regional tourism will account for most of the growth.

Indonesia tourism minister Mari Pangestu said: “Domestic tourism provides 60% of tourism revenue across the world, and most definitely domestic tourism will grow.” Of those who travel internationally, Pangestu said: “Most visit destinations in their own region ­ four out of five do so worldwide.”

She added: “Goods travel farther than people. In southeast Asia 45% of travel is intra-regional while intra-regional trade is 25%.”

Sourced from Travel Weekly

‘Agents will prevail’, WTTC Summit told

'Agents will prevail', WTTC Summit toldBy Ian Taylor

Travel agents received a staunch defence against claims they could not survive at the World Travel and Tourism Council (WTTC) Asia Summit in Seoul.BBC presenter and summit moderator Nick Ross suggested repeatedly that agents were a thing of the past.

But Amadeus Asia-Pacific president David Brett (pictured) said: “A lot of people predicted the demise of agents when the internet came along, yet travel agents survived and improved what they do.

“We provide search tools and an enormous amount of information and we need people who are experts to deliver those servcies to customers.”

Deepak Ohri, chief executive of Bangkok-based luxury hotel group Lebua Hotels and Resorts agreed, saying: “So long as agents are conscious of travellers’ behaviour and deliver quality, they will survive.

“Those who do not survive will not have kept up.”

Economist Adam Sacks, president of Tourism Economics – a division of UK-based Oxford Economics – also agreed.

He said: “The travel agency model has evolved – it’s not as big as it was. But that does not mean the whole function has become obsolete.”

JTB Corp president and chief executive Hiromi Tagawa insisted he was confident agents would retain their place. JTB Corp is Japan’s largest travel agency.

Tagawa pointed out: “We just celebrated 100 years since our foundation.”

Sourced from Travel Weekly

Airline boss brands union deals as ‘handcuffs’

Airline boss brands union deals as 'handcuffs'A leading airline chief executive has described trade union agreements as “handcuffs” on traditional carriers.James Hogan, head of Etihad Airways, blamed “restrictive political and industrial agreements” for inflexibility among long-established airlines.

Hogan told the World Travel and Tourism Council (WTTC) summit in Abu Dhabi: “Airlines are burdened with costs and there has been considerable inflexibility in the legacy model.

“The mind set is wrong. In the US recently I asked a ground handler, ‘Are you a member of the airline or the union.’ Unfortunately, he said the union.

“To new entrants like Etihad, the ability to achieve lower unit costs is fundamental. We weren’t burdened by the legacy handcuffs – union agreements, multiple hubs.”

Abu Dhabi-based Etihad has grown in 10 years to become a major network carrier alongside neighbours Emirates and Qatar Airways.

Hogan said: “Asian carriers were able to break the handcuffs a bit – the deals with engineers and pilots that may have been relevant 20 years ago but not today.

“But unless there is radical change it will be tough for legacy carriers to achieve the change they need. Inflexibility is a real barrier.

“Legacy union agreements stop an airline moving forward.”

Hogan said there are no unions at Etihad. He added:: “At Etihad, we don’t call human resources HR, we call it ‘people and performance’, because performance is fundamental.”

Former British Airways boss Willie Walsh, now chief executive of BA parent IAG, agreed with Hogan on the need for change in union agreements.

Walsh told the summit: “The traditional way to avoid disputes was to give in and that is why the industry has not made any money.”

He said: “You have to be prepared to accept some friction. This is an industry that needs to change. It is about the rate of change.”

Walsh oversaw an 18-month dispute with cabin crew at the end of his term running BA, while sister carrier Iberia was grounded recently by strikes against 4,500 job losses

Sourced from Travel Weekly

Travel and tourism outperforming economy, finds WTTC

Travel and tourism outperforming economy, finds WTTC

By Phil Davies

The UK travel and tourism industry outperformed the country’s overall economy last year with the help of major events like the Olympics.

The sector’s contribution to GDP grew by 0.5%, compared with 0.1% total GDP growth, according to research by the World Travel & Tourism Council.

The total economic contribution in 2012 – taking account of its direct, indirect and induced impacts – was £106.3 billion in GDP, £8.9 billion in investment – 4% of total investment – and £25.3 billion in exports – 5% of total exports,

The industry supported more than 2.42 million jobs in 2012 (8% of UK total employment) with a forecasted 1% expansion in 2013.

The UK attracted 29.2 million visitors in 2012, whose total spending increased by 2%, UN World Tourism Organisation figures show.

WTTC and UNWTO predict that the number of international travellers to the UK will rise by 2% to 29.8 million this year.

The industry is expected to support nearly 266 million jobs in 2013 and continue to outperform many other industries.

But government action is needed on Air Passenger Duty, visa regulations and grid-locked airports.

WTTC president and chief executive David Scowsill said: “Travel and tourism has been a real hero for the British economy. The UK is the only European G20 country where travel and tourism outperformed its economy in 2012.

“The growth and saviour of the industry in the UK was leisure spending and this is very likely to have been driven by recent events such as the Royal Wedding, the Diamond Jubilee and the Olympics”.

WTTC is predicting the industry will expand its total contribution to GDP by 1.7% this year, compared with the 2.4% predicted for global economic travel and tourism growth. The organisation also predicts the travel and tourism industry will expand its total contribution to global GDP by 3.2% in 2013, faster than the 2.4% predicted for global economic growth.

Scowsill added: “This year’s results hammer home that travel and tourism is an important driver for UK economic development and for job creation.

“But the UK’s restrictive visa and tax regimes are holding back further economic growth.

“The British government is charging the highest Air Passenger Duty tax in the world, insisting on lengthy and costly visa application processes, whilst postponing decisions on key infrastructure expansion.

“WTTC is calling on the UK government to loosen visa bureaucracy, reduce high air passenger duty and improve airport capacity. The UK government is not maximising the opportunity that this industry provides to stimulate job creation and economic growth.”

Among the 20 largest global economies (the G20), South Korea, China, South Africa and Indonesia performed best.

Growth of less than 1% in Europe and 2% in the US was counter-balanced by 10% growth in South Korea, 7% in China and South Africa and 6% in Indonesia.

Scowsill warned: “The UK is being left behind by emerging market destinations such as China, which is investing and seeing strong growth. In fact, WTTC forecasts that China will overtake the US to be the world’s biggest travel and tourism economy by 2023.”

Sourced from Travel Weekly