Travel Trends: Tourism on the Up & Up — by Lakshman Ratnapala

International tourism is heralding the good news of a complete recovery from the decline suffered under the impact of the global economic crisis of the last two years.  The reason for the current optimism is the actual performance last year (2010), which was forecast to reach levels of up to 50 million more international tourists than in 2009 and even to improve on the record pre-crisis 2008 count by up to 10 million.  The World Tourism Barometer projects a growth this year (2011) of between 4 percent to 5 percent.

Asia is, once again leading the recovery, showing outstanding resilience, although in comparison, recovery was lagging in parts of Europe and the Americas.  The Asian region which was caught quite early by the economic crisis was also the first to show signs of recovery.  Compared with the pre-crisis year of 2008, Asia gained an extra 10 million international tourist arrivals last year (2010), with most destinations registering double-digit growth rates, many such as Sri Lanka even above 20 percent.

These results reinforce the message that tourism is one of the most dynamic economic sectors and a key driver in creating much needed growth and employment. Accordingly, the World Tourism Organization (WTO) is calling upon governments, and multilateral forums such as the G-20, to place tourism higher in their agendas as the sector can contribute to common objectives of sustaining recovery, regaining jobs and promoting sustainable development.  WTO’s Secretary-General Taleh Rifai warns that “in spite of tourism’s proven contribution to the economy, there has been an increased temptation among governments to introduce and increase taxation on travel, particularly on air transport”.  Rifai claims these impediments seriously effect tourism’s capacity to generate jobs and stimulate growth, through export earnings that are crucial to a stable economic recovery.

The WTO’s panel of tourism experts say “the two-speed economy in which we currently live, and which will last for the foreseeable future, favors emerging destinations, which will quickly gain market share of international tourism arrivals”.  Emerging destinations will continue to lead growth, taking advantage of a far-from-exhausted demand from neighboring countries.

International tourism receipts show a similar trend to that of arrivals, but growing at a somewhat more moderate pace.  This gap may be explained by persisting price competition, shorter stays by tourists in destinations and larger volumes of arrivals in “value for money destinations”.

International tourism expenditure has also rebounded, led by emerging economies such as Brazil, China and Russia posting the strongest growth among the major spenders.  Expenditure among the advanced economies has generally been restrained, but there has been a modest growth from the USA, Italy, Germany and France, as well as a return in spending by the Japanese on outbound tourism.

In domestic tourism, a shift in power has already occurred, mostly thanks to the large domestic markets of China, India and Brazil.

KEY  TRENDS

  • Over the past six decades, tourism has experienced continued expansion and diversification to become one of the largest and fastest growing economic sectors in the world.  Many new destinations have emerged alongside the traditional ones of Europe and North America.
  • In spite of occasional shocks, international tourist arrivals have shown virtually uninterrupted growth from 25 million in 1950 to 277 million in 1980, to 438 million in 1990, to 683 million in 2000, to 919 million in 2008.
  • Under the impact of the worldwide financial crisis and following economic recession, international tourist arrivals declined by 4.2 % to 880 million in 2009.
  • International tourism receipts reached US$ 852 billion in 2009, corresponding to a decrease in real terms of 5.7 %  on 2008.
  • The dismal results of 2009 followed four years of strong, above-trend growth.  Including 2009, average annual growth since 2000 has been 3%.
  • Growth returned to international tourism in the last quarter of 2009 after 14 months of decline.
  • As growth has been particularly fast in the world’s emerging regions, the share in international tourist arrivals received by emerging and developing countries has steadily risen, from 32% in 1990 to 47% in 2009.
  • By 2020 international arrivals are expected to reach 1.6 billion.

— Lakshman Ratnapala
BATW International Consultant

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