European travel industry likely to stay flat

Tuesday 29, December 2009


European travel industry likely to stay flat


ITB World Travel Trends Report says small gains from Asia won’t be enough to offset low demand from economically uncertain American and European travellers


Decline in demand for European destinations in 2009 will ease, with some instances of growth in 2010. But any upturns in demand from emerging markets in Asia won’t be enough to offset continued flat or negative demand from American and European markets. These are just some of the key issues highlighted in the latest ITB World Travel Trends Report, commissioned by Messe Berlin, the organisers of ITB Berlin, and compiled by IPK International.


The report quotes IMF predictions that developed economies are shaping up for an average 3% decline in GDP for 2009, compared to 2% growth in emerging economies, led by top performers China and India. However, salvation from Asia is far from certain, says the report. Factors such as oil price volatility, H1N1 fears, the Chinese government directive that government employees shouldn’t travel abroad, and a general trend to domestic, cheaper short haul travel in Asia - and worldwide - all indicate that European destinations are likely to have a lean 2010.


The ITB World Travel Trends Report notes that the impact of the global recession on travel and tourism demand has been severe. In the first eight months of 2009, international tourist arrivals fell by 7%, according to the World Tourism Organization (UNWTO), which is now forecasting a decline of 4% to 6% for full year 2009. The long-term trend in European travel has been for a steady increase in the use of air travel. Car travel has been weak for several years. However, Europeans, with a keen eye on costs, economised in the first eight months 2009 by hitting the road to travel. There was a 2% increase in car travel, while air travel declined 8%.


The report also noted that rail travel had been enjoying a recovery in tourism demand, from lower levels, associated with the introduction of new high-speed services. However, demand for rail travel in Europe declined 3% in the first eight months of 2009.

Cruising had been a booming market. Ferry travel had been doing well. However, trips by ship declined by 10% in the first eight months of 2009. Coach travel, among European travellers also continued to slide, suffering a drop of 20% for the first eight months of 2009. However, IPK cautions that such trends in the first two-thirds of 2009 may only be indicative. Full- year results may reveal new or modified trends.


Sun and beach holidays, which form by far the most important category of outbound holidays among Europeans, have performed relatively well in both 2008 and 2009, following three years of only modest growth. However, holidaymaker’s preferences for traditional destinations such as Spain, France and Greece have changed. Market shares were lost to newer holiday destinations in North Africa, the Eastern Mediterranean and further a field.




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