Walter warned the pound
would continue to decline
against the dollar and the euro.
Fellow economist John
Walker, chairman of Oxford
Tourism Economics, took a
generally upbeat view at a
World Travel and Tourism
Council summit at WTM,
despite suggesting: “People
feel poorer and 2009 will be a
tough year. There will be an
effect on consumer spending
for several quarters.”
He argued: “There will be
some recovery in 2010 and that
is critical for the industry.”
WTTC president and
chief executive John-Claude
Baumgarten was similarly
upbeat, arguing: “Whenever
there has been a downturn,
consumers have kept travelling.
They travel less far, spend
less time away and spend less
money. But 2010 could see the
restart of travel and tourism.”
Walker was particularly
optimistic about prospects for
the UK. “Reductions in UK
interest rates will continue,
and we should see tax cuts and
a substantial increase in government
spending,” he said.
“What matters most to travel
is real disposable income and it
is likely real incomes will rise in
2009. Infl ation in the UK is
going to be negative and wages
www.travelweekly.co.uk
“Whenever
there has been
a downturn,
consumers have
kept travelling.
They travel less
far, spend less time
away and spend
less money”
HOTEL BOOKINGS
Business advisory fi rm
Deloitte reports falling
hotel bookings and revenue
across Europe, with one
of the sharpest declines
in London.
Average revenue per
available room over the
year to September was
down 1.5% to €76, while
occupancy fell 1.9%.
However, the September
revPAR fi gure was down
6.7% across Europe.
London’s hotels suff ered a
will be growing strongly.”
However, that view may be
undermined by rising
unemployment and how fast
the offi cial UK infl ation
measure falls from the 5.2%
annual rate it hit last month –
particularly when the devalued
pound will make imports more
expensive and mitigate the
impact of falling fuel prices.
Speaking at the same WTTC
summit, Walter was more pessimistic,
warning: “This is the
onset of the most pronounced
global recession this generation
or the previous generation
has seen. It may be comparable
to the inter-war period.”
7.9% fall. By comparison,
Paris – probably London’s
greatest rival – saw a 5.6%
rise in revPAR in the same
period. However, the recent
drop in the value of sterling
will make London cheaper
for visitors from the US,
Japan and the eurozone.
Hotel investment is down
75% this year compared
with 2007 and Deloitte
warns 114,000 jobs in UK
tourism are at risk.
Deloitte managing
He suggested only a slim
possibility of the industry recovering
in 2010, saying: “The
correction phase will not be a
few quarters, but a few years.
“If governments and central
banks do all the right things
and there is co-operation rather
than devaluation of currencies
and protection of industries, we
stand a chance of recovery in
2010. But I am not sure governments
will do that.”
Walter also suggested the
fall in the oil price would not
be permanent. “Be assured, if
we see a lower price it will be
higher again soon.”
>See Opinion, page 29
partner of tourism, hospitality
and leisure Alex
Kyriakidis said: “Hoteliers
face disappearing consumer
confi dence, a squeeze on
credit and a tightening of
business spending.”
A report by PricewaterhouseCoopers
predicts
London hotel income will
fall by almost one quarter
next year. It forecasts an
8.7% decline in occupancy
and a drop of more than 23%
in revPAR in the capital.
AIR TRAFFIC
Passenger numbers at BAA
airports fell 6% year on year
in October following a 5%
decline in September.
Traffi c was down 3.7% at
Heathrow, 10.3% at Gatwick
and 6.3% at Stansted –
suggesting traditional
scheduled carriers, low-cost
airlines and charters are all
suff ering. BAA’s three
Scottish airports saw 6.1%
fewer passengers.
Traffi c across the North
Atlantic was down 7.1%,
despite the open-skies
regime between Europe and
the US. European traffi c was
down 15.7% for charters and
5.1% for scheduled airlines.
Domestic traffi c was down
6.3%. BAA traffi c volumes
have now fallen for seven
months. But airports
elsewhere in Europe are also
seeing fewer passengers.
Frankfurt airport reported
a 4.9% year-on-year
decrease in October.
British Airways reported
a 9.2% fall in premium traffi c
on a year ago in October
and a 3.3% fall in economy,
following declines of 8.6%
in premium and 4.1% in
economy in September. BA
chief executive Willie Walsh
described the period as “one
of the bleakest on record”.
Despite predictions of
continued growth in
emerging markets, the
Association of Asia-Pacifi c
Airlines reported: “Passenger
demand has fallen
dramatically, with expectations
of a further deterioration
in the fi rst half of 2009.”
Middle East carriers are
not immune – September
passenger traffi c in the
region was down 2.8%
year on year.
IATA director-general
Giovanni Bisignani says:
“Even the good news that
the oil price has fallen is
not enough to off set the
drop in demand.”
Walsh said this period
is ‘one of the bleakest
on record’
November 21 2008 | Travel Weekly | 23
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.