Tourism futures: A case for 3 dimensional thinking

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The world is swallowing a dangerous cocktail of economic recession, financial malaise, credit crunch, stock market turmoil and crumbling business/consumer confidence.

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The world is swallowing a dangerous cocktail of economic recession, financial malaise, credit crunch, stock market turmoil and crumbling business/consumer confidence. Corporations and countries are being bailed out. Warren Buffet, says he can’t predict the next six months except headlines will be nasty and severe but in 4 years time markets and the economy will be just dandy. Given Mr Buffet’s track record, I’ll defer to his wisdom and offer my take on key issues for tourism.

Current estimates of 2008/2009 performance of the sector, globally, regionally and nationally will be revised downwards for the next 6 months as rapidly worsening macroeconomic structures progressively unfold. And as business and consumer confidence follows suit. The situation will only change with coordinated widespread stimulus packages, a global trade deal and nationally coordinated initiatives to shore up failing structures and sectors – which will bite over time.

All markets will be affected – but not equally, as business and consumers cut back on budgets, postpone or cancel travel plans, go closer to home, trade down in price/quality options while reducing stay and spend. We will see major consolidation across the sector – transport, accommodation and related services. It will be vertical and horizontal. Job losses will be significant with bankruptcies, mergers and takeovers all too familiar. The big losers will be in the world’s poorest countries, where tourism is an economic lifeline and development imperative. We must advocate for their support now – not when it is too late.

Those equipped to take advantage – other than having deep pockets – will ruthlessly cut non-essential costs and reposition products/prices to feasible markets and reliable segments. They will protect vital resources, starting with the human ones and eliminate the unnecessary.

This is also the moment to plan “smart tourism” – clean: green: ethical and quality – no mat-ter where in the product range and use ICT and public/private partnership to extend operational and delivery capabilities. Skilfully done, it can reduce medium term costs while increasing customer appeal and satisfaction. For the UK Olympics or the African Soccer World Cup there will be special positioning and promotion challenges.

Lessons from UNWTO’s “Resilience” activity can help in tracking market shifts, identifying best practice and sharing information. As well as identifying tourism as a key player in the emerging New Green Economy.

In this context, it’s vital to position tourism as the logical sector to help economic stimulus – whether its employment support (because we create so many job) or infrastructure programs (because our payback across the economy is so pervasive and wide ranging). Particularly when financial mechanisms are considered – we will deliver on tax breaks and moratoria better than most industries and money spent on tourism promotion will provide massive export and investment returns.

It’s equally vital to stay on course with our development and climate action, because it’s right and because policymakers must do so. Tourism is critical for development as an export driver and job creator. It’s critical for climate, like all major socio-economic sectors and a key component of any green technology paradigm shift.

Today, any consideration of the future should be like three-dimensional chess, intensive actions in the hyper-dynamic 2008 economic game must strengthen the 2015 development game and the 2050 climate game. Such vision is not easy, faced with immediate crisis of this proportion. But when the upturn occurs, because economies ultimately correct and mobility is hardwired into the human gene – the big winners will be those who really understand the value of aligning short- and long-term decisions.

Geoffrey Lipman is currently the assistant secretary general of the United Nations World Tourism Organization and is a professor at Victoria University and Christel DeHaan Institute.

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Editor in chief is Linda Hohnholz.