World travel and tourism is forecast to suffer its sharpest contraction in decades this year at a cost of 10 million jobs.
The World Travel and Tourism Council tore up its previous forecasts at German trade show ITB in Berlin to predict a 3.6% fall in tourism revenue worldwide in 2009 and a 0.3% recovery in 2010.
As recently as last August, the WTTC was predicting a 2% increase in travel income this year and in November it foresaw only a 1% decline.
Oxford Economics managing director Adrian Cooper, whose forecasts underpin the WTTC figures, said: “We are seeing the worst global contraction in 50 years.
The sharp rise in unemployment in all major economies can only worsen consumer confidence. Even those who keep their jobs will worry about job security.”
Cooper suggested the unprecedented response by governments means there is a chance the world economy will stabilise this year and begin to improve next year.
But he warned: “In the short term, the situation is uncertain. The downturn has been much sharper than anyone anticipated. There are significant risks despite the action governments are taking. It is vital companies have plans to downsize.”
WTTC president and chief executive Jean-Claude Baum-garten agreed: “All major companies will have to be ready to deal with a further downturn. In a couple of months we may have to reconsider our forecasts.”
The WTTC foresees global tourism investment falling 5% this year and business travel down 7%, although it predicts travel and tourism will recover sufficiently to enjoy average annual growth of 4% over the next 10 years.
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