At the annual event ‘Prospects’ event in January 2008
At the annual Prospects meeting organised by the Tourism Society on Thursday 10 January, a panel of industry experts and tourism professionals came together to discuss the prospects for tourism in 2008.
Geoffrey Lipman, Assistant Secretary General for the UNWTO and chairman of the event kicked off the proceedings with the positive WTO forecast of a global 5% growth which is likely to continue for 2008. Europe is not likely to grow as much but developing countries will see a higher growth. Factors which might hinder this positive prediction in 2008 include the economy, currency exchanges, natural and man-made disasters and war.
The Tourism Society conducted a survey of member predictions for 2008 and found the following majority views:
Hotel occupancies will remain the same but London’s revenue will increase
85% of respondents thought that the use of hotel review sites will increase
75% thought that domestic short breaks will increase
69% thought that independently arranged overseas holidays will increase
75% responded that budget airline passenger numbers would increase
73% thought that the use of comparison websites such as Expedia would increase vs individual company websites such as ba.com.
94% thought that the use of the internet to book overseas holidays would increase against 86% who thought the use of the internet to book domestic trips would increase and only 76% who thought the same for business trips.
Nick Cust, Joint Managing Director of Superbreak predicted that the first half of 2008 will be tough but London is likely to be unaffected due to positive factors such as the new eurostar link from St Pancras, events at the O2 Arena and new shows in London’s theatre land. With a slow-down in the housing market, domestic short breaks might see a slight upturn however the provinces, especially hotels, will suffer against London’s growth and will be lucky to hold the same turnover level of 2007 despite improvements in the second half of 2008.
Stephen Dowd, CEO of UKinbound explained that the negative issues in 2007 including APD and VISA cost increases, the pound reaching US$2, terrorist activity, airport chaos and flooding, Foot and Mouth, VisitBritain’s budget cuts, and the new biometric VISAS were all barriers to the UK effectively selling its tourism product internationally. Stephen predicted a downturn of visitor numbers by 1-2% to 32 million to the level of 2005 and revenues are expected to decrease by 4-5%. The social impact of this decrease is the potential loss of 8,000 jobs in tourism spread across the UK. British Tourism Week in March will enable the UK tourism industry to promote itself and lobby the government to revoke the APD and VISA charges.
Tom Jenkins, Executive Director of the European Tour Operators Association (ETOA) explained that the travel industry is changing with budget airlines creating new destinations and customer’s behaviour and travel patterns changing as a result. The main factor to watch in 2008 is the reform process for the Passenger Travel Directive.
Vanessa Cotton, MD of the Conference and Events Division at the Excel Centre had a positive outlook for the business tourism sector which Vanessa described as an exciting, resilient and growing market sector which is worth £22.8 billion to UK economy. Business tourism stimulates the economy, encourages future investment and contributes to urban regeneration. Events will be expensive to hold with oil and gas price increases and inflation. Vanessa predicted that a new standard called BS8901 would be very important in the coming year for sustainable event management. 2012 is a huge opportunity but the current lack of cohesion in the UK could hinder the potential. The excel centre is predicting a 20% increase in turnover in 2008 through occupancy and yield.
Barry Humphreys, Director of External Affairs at Virgin Atlantic predicted that 2008 would be an interesting year; IATA have released a new industry financial forecast estimating a global industry profit of US$5.6 billion in 2007 falling to US$5.0 billion in 2008. (www.iata.org). The environment will continue to be a huge issue and Virgin are part of ‘flyingmatters’; a coalition set up to contribute to a balanced and informed debate on aviation’s contribution to climate change. Virgin will be focussed on new technology in 2008 and are due to fly the first plane on biofuel. The government consultation into the expansion to Heathrow is underway which Barry suggested was vital for the UK economy and tourism industry. The Open Skies agreement will see new and increased services from the EU to the US from Heathrow; stage 1 starts in March and stage 2 in the summer.