Magazine Columns

Testing Times (Destination UK Article)

Wednesday 18 June 2008, 3:31 PM

Global tourism growth has averaged over 4% for the past 10 years. Fuelled by a strongly growing global economy and a boom in personal wealth it has shrugging-off the impacts of 9/11, the second gulf war, SARS and a host of other difficulties.

But with the economic downturn and the increase in oil prices over the last 9 months, it was unrealistic to presume this rate of global tourism industry could continue. However, what is startling is the speed at which reports are starting to emerge from tourist boards around the world on the rapid deterioration of the market. Take for example the Tourism Industry Association of Canada (TIAC) which has recently released a report stating that the Canadian tourism industry “is on the precipice of an unprecedented decline, which could have a massive impact on the 1.6 million Canadians whose jobs depend on this sector”. There has been a 14% decline in visitors from the American market which, on top of a surging exchange rate has put the brakes on inbound tourism. Tellingly, the TIAC’s CEO, Randy Williams is quoted in the press as saying that “in recent years, a low Canadian dollar and cheap fuel prices concealed or mitigated the many challenges facing our competitiveness as a world class destination ... we need urgent action from governments at all levels to address some long-standing structural burdens on our industry” High on the list of structural burdens contained in the report is the deterioration in the country’s transport infrastructure (both international and domestic) and the increasing difficulty that overseas visitors have in complying with tightened entry requirements to the country. The US tourism industry is also in similarly poor shape The number of overseas visitors to the United States is still down 11% compared to before 9/11, even though worldwide travel has risen by 27% since 2002 and the US dollar has depreciated by 40% against the euro over the same period, making America a relatively cheap destination for Europeans. Despite the fall in the value of the US dollar, it has been estimated that the country’s stricter visa and entry requirements has caused a $3.4bn per annum loss in international tourism earnings. On top of this the student sector has also been reduced by $1bn per annum as 1 in 4 applications to study in the US are now being rejected. The travel industry has been strongly lobbying the US Government to commit $200m to the re-establishment of a National Tourist Board and a promotional campaign that tells the world that, despite the increased security measures, the United States is still welcoming to overseas visitors and has much to offer. It estimates that these measures would attract 1.6 million new visitors to America who would spend $8 billion. It was unsuccessful in convincing the Government to include the Travel Promotion Act in the recent economic stimulus package but remains confident that the Act will be passed before the end of the year. One Tourist Board that has been successful is gaining funding from Government is Tourism Queensland in Australia. It has just been granted a A$4m assistance package to overcome cuts to domestic and international flights to the State as airlines such as Qantas start to close marginal routes in response to increased fuel costs. As Tourism Queensland decides how best to use the funds, the State Government has entered emergency talks with a number of airlines to find out what it can do to convince them to re-open important tourism routes. There is a pattern emerging here. Over the last 10 years Governments have tended to take tourism growth for granted and paid little attention to improving infrastructure, reducing regulatory burden or increasing marketing budgets. It seemed that tourism was going to grow regardless of what barriers they imposed. The global economic downturn is suddenly exposing the failings of maintaining a laissez faire attitude towards tourism policy. It’s a lesson that the UK Government needs to take on board – quickly. Kurt Janson

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