Travel Trends: "Period of Transition" by Lakshman Ratnapala

BATW International Consultant,  Lakshman Ratnapala writes that tourism is in an year of transformation.

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I recall a former Prime Minister of Sri Lanka, Solomon Bandaranaike, expounding his vision of the world in an address to the United Nations in New York as one “in a period of transition”.  He said we were then between two worlds — one in the throes of death and the other struggling to be born.

Though not quite in the same league as the Bandaranaike world vision, those words seem apt to describe today’s state of tourism, international and national, both emerging from periods of conflict — economic and social — and both energetically trying to create a brighter new world.

At this half way mark of the year, 2010 promises to be a year of transformation against the backdrop of both an upturn in international tourism and overall economic indicators. Industry forecasts are for a return to growth in tourist arrivals, after the drop of 4% last year.  The World Tourism Organization (WTO) now thinks the 2010 growth will be between 3% and 4%.  The Pacific Asia Travel Association (PATA) predicts an increase of 2.7% each year to 2012 for international travel to Asia Pacific destinations.  South Asia is forecast to grow the fastest at an average of 4.9% per annum over the next three years to 2012, followed by Southeast Asia at 4.8%

One significant aspect of the international forecasts by both WTO and PATA is that the overall growth rates for global and regional tourism will remain very much lower from historical levels for the next few years.  This in turn, heralds the need for tourism-based businesses to continue to find profits in cost containment rather than in volume growth.  PATA predicts growth to be very uneven at a number of levels, especially at the individual country of origin-to-destination levels.

INTERNATIONAL  TOURISM  FORECAST

2009                FORECAST 2010

WORLD                                                         – 4 %                + 3 %  to +  4 %

Asia – Pacific                                               – 2 %                + 5 % to  + 7 %

Middle East                                                 – 6 %                + 5 %  to  + 9 %

Americas                                                      – 5 %                + 2 %  to  + 4 %

Europe                                                          – 6 %                + 1 %  to  +  3 %

Africa                                                           + 5 %               + 4 %  to  +  7 %

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As 2010 develops into a year of transformation, analysts see several upside opportunities :

*    Business and consumer confidence has picked up.

*    Interest rates and inflation remain low.

*    A slump is generally followed by a rebound due to pent-up demand.

*     Scope for revival in source markets

Lakshman Ratnapala
BATW International Consultant

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