WTTC Sees Rise in Tourism for 2010, Slower Recovery for 2011

The World Travel & Tourism Council (WTTC) issued revised forecasts for both 2010 and 2011, which showed global tourism growth is set to beat expectations this year but will come in lower than first forecast for 2011.

According to Oxford Economics, which conducts the research for WTTC, Global travel and tourism economy real GDP growth is now expected to rise by 2 percent this year (up from the 0.5 percent predicted in January), creating an extra 946,000 jobs worldwide.

But global travel and tourism economy real GDP for 2011 is now expected to grow 2.7 percent, compared to 3.2 percent predicted in January. That means full recovery from the 2009 recessionary period is going to take a bit longer, according to WTTC officials.

Indeed, expenditure on travel and tourism is still well down on its 2008 peak and the pace of recovery in 2011 is likely to be slower than previously forecast. Western consumers continue to pay down debt and many developed economies move to tighten fiscal policy. But there has been a faster-than-expected rebound in international travel, particularly in Asian markets.

Looking at growth in some world regions Asia is still set to see growth of 4.2 percent, though this is slightly down from the initial forecast. Glancing over some key countries in Asia, China will remain the main engine of global growth over the next decade. India will enjoy a robust recovery following mild slowdown in 2009 whereas Japan’s real GDP growth will increase gradually, reaching a cyclical peak in 2013.

Performing less well is Europe, according to WTTC. Europe will only manage a 1.4 percent growth this year (down 0.2 percent). Looking at some key countries in this region, the United Kingdom’s travel and tourism economy GDP will contract further this year, before growth starts to accelerate from 2011, with the 2012 Olympics set to boost activity. France and Spain will suffer further contraction in 2010 with no real growth until 2012, and Germany’s strong visitor arrival growth will be offset by weak outlook for investment, according to WTTC.

Despite sharp growth in foreign visitor arrivals so far, recovery for the United States in 2010 is being dragged back by very weak investment and business travel, but long-term growth prospects for domestic (2.1 billion trips in 2010, of which 50 percent overnight) and inbound arrivals are optimistic. WTTC will hold its 2011 Global Travel & Tourism Summit in Las Vegas, May 10-12.

In all, WTTC revised its 2011 tourism growth forecasts downward for every world region. Tourism GDP is expected to grow 1.4 percent, versus 1.6 percent predicted in January; for the Americas, tourism expected to grow 2.4 percent, versus 2.1 percent originally predicted; for the Middle East, tourism is expected to grow 4.1 percent, versus the 5.1 percent originally predicted; for Africa, tourism is expected to grow 3 percent, versus 3.8 percent originally predicted; for Asia, tourism is expected to grow 4.2 percent, versus the 4.6 percent originally predicted. WTTC officials blamed a lagging world economy that has been very slow to recover momentum; reduced government spending and cost-cutting, particularly in developed countries; and continued high unemployment rates.