After four
years of sustained strong growth, which continued through the month of
May 2008, outbound travel demand slowed considerably from June, with
growth slipping into negative figures from September in some regions.
      
      
       
‘Our challenge is to see through the pressures of today and prepare for
a different world,’ said Rolf Freitag, President & CEO of IPK
International in his summing up at the close of IPK’s annual World
Travel Monitor Forum held on 6-7 November in San Giuliano Terme near
Pisa, Italy. ‘But predicting the timing of the end of the current
global economic crisis and the start of the recovery remains an even
bigger challenge,’ he added, ‘although we have every confidence in
tourism’s longer-term resilience.’

After four years of sustained strong growth, which continued through
the month of May 2008, outbound travel demand slowed considerably from
June, with growth slipping into negative figures from September in some
regions. As a result, the consensus of the more than 60 tourism experts
from some 30 countries around the world gathered in Pisa was that the
growth in demand for international tourism – expressed in total
outbound trip volume – will struggle to reach 3% this year.

The financial crisis and the recession have clearly reached the
international travel markets. Many airlines and tour operators have
meanwhile reduced capacity for 2009. The majority of the experts
gathered in Pisa believe that demand for international travel will be
down by about 1% in 2009. But they also think that the crisis will not
last longer than 12 to 18 months.

Some parts of the world may start to see the beginning of a revival in
2009, the Forum agreed, but, given the lack of clarity regarding the
main drivers of the crisis and its impact on disposable incomes – not
to mention continuing uncertainties over the price of oil, currency
fluctuations, etc – the recovery of tourism demand may prove rather
more elusive. This explains the view of the majority of the Pisa
participants that the world will only see a strong recovery of travel
and tourism in 2010, accelerating to new records in 2011 and 2012.

These were some of the key messages to come out of the two days of
intensive discussions between world tourism experts at the 16th edition
of what has become more commonly known as the Pisa Forum. As usual, it
was organised by IPK International, founders and producers of the World
Travel Monitor, and sponsored by ITB Berlin.

Based on trends over the first eight months of 2008 from the region’s
leading outbound travel source markets, Europe recorded a growth of 3%
in both number of trips and foreign overnight volume. But the overall
monthly average fell from +6% in January to April to just +1% in May to
August, reflecting the impact of the credit crunch, high oil prices and
the financial crisis on demand.

The leading European outbound markets in terms of growth were Russia
(+15%) and Finland (+9%), with Norway and Spain coming a distant third
in the overall ranking (each up 3%). The only market in Europe to
suffer an outbound decline, meanwhile, was France (-4%).

Although the trend appears to have reversed since the end of the
summer, European corporate travel – including trips for meetings and
conferences – grew by twice the rate of holiday travel (+8% compared
with +4% for holidays) from January through August, while other types
of leisure trips, include visits to friends and relations, declined by
5%.

Outbound travel from other leading and emerging markets has shown
similar trends in 2008 to those in Europe – in particular, a shift to
short-haul from long-haul travel, a reduction in secondary trips, and a
modest decline in low-cost/no-frills air travel in favour of trips by
different means of surface transport.

With the exception of travel to Mexico (+5.6% through the month of
July), US outbound air travel was at best flat in the first five months
of 2008, but it fell by more than 4% to Europe and nearly 5% to Canada.
Thanks in no small part to the low US dollar – in the first eight
months of 2008, at least – Canadian outbound travel, on the other hand,
was buoyant (+13%).

Travel from Latin American markets has been strong so far this year,
especially from Brazil and Argentina, although growth is expected to
slow in the last few months of the year, especially given the
depreciation of the Brazilian real.

In Asia, in contrast – one of the world’s strongest outbound travel
growth regions in 2007 – there have been some disappointing
performances, exacerbated by the reduced airline capacity on many
routes, the tightened security surrounding the summer Olympics in
Beijing (which made visas more difficult to obtain and discouraged
travel to China) and by the increased price of travel and cost of
living. IPK International expects the region to record around 3% growth
in outbound trips for the year as a whole – half the rate recorded in
2007 – with no growth or declines from Japan, South Korea and Taiwan.

Details of trends from leading and emerging markets in the first eight
months of 2008, as well forecasts for 2009 and an analysis of some of
the opportunities and threats identified by the Pisa Forum
participants, will be available from the ITB World Travel Trends Report
prepared by IPK, to be published in end-November by ITB Berlin. The
report can be downloaded from www.itb-berlin.com.