Expected return to strong growth after three difficult years

The 4th World Travel & Tourism Council (WTTC) Global Summit, hosted by Qatar Airways in Doha from 1-3 May, attracted more than 800 public and private sector decision-makers and journalists from over 40 countries around the world. This record number of participants was a clear demonstration of industry solidarity and unity at an important period in Travel & Tourism`s history.

Over the past couple of years, the series of crises that have affected Travel & Tourism has increased awareness, more than ever before, of the contribution of Travel & Tourism to the creation of wealth, jobs and prosperity at all levels of the economy, Jean-Claude Baumgarten, WTTC President, told delegates gathered for the two-day meeting. Travel & Tourism is uniquely placed to encourage close contact between peoples and cultures, thereby promoting greater international understanding, tolerance and respect of different cultures, religions and values.

Last year`s Summit, held in Vilamoura, Portugal, addressed the critical question of how to Build New Tourism in today`s marketplace, said WTTC Chairman, Vincent A Wolfington. The different crises of the past couple of years have been a catalyst for some fundamental changes in demand that have been slowly emerging since the mid- 1990s, he added, changes that include a redefinition of personal behaviour and lifestyles.

Together with socio-demographic shifts, these will be the main factors influencing demand for Travel & Tourism in the coming years. It is critical for the industry to take stock of all these changes and ensure that all stakeholders – whether governments, host communities, the private sector of the industry, or the media – work together to drive changes in supply that will ensure the sustainable and profitable growth of the sector going forward, bringing benefits to everyone.

Under the theme Driving Change, the 4th Global Summit featured an impressive list of well-known speakers from different sectors of the industry and government, and representing all regions of the world. But, while the speakers and panellists set the scene for each session, the unique format of this year`s Summit ensured that all participants also contributed to the lively debates that followed.

The good news for the industry is that the current prospects for Travel & Tourism growth are better than they have been for a long time, thanks to the improved global economy – one of the main drivers of demand. But while the USA, together with China, is leading this economic growth, it is also, paradoxically, a source of anxiety. The US recovery has so far been a jobless one, with one million additional jobs lost since the recovery started. This is due to the fact that some 70 per cent of jobs lost are structural, and are simply not being replaced by jobs in new industries.

But governments need to recognize the fact that this is where Travel & Tourism can help, said Baumgarten, since it takes up unemployment at a much faster rate than other economic sectors.

Other areas – cited at the Summit – in which governments can and should act to facilitate the sustainable growth of Travel & Tourism and drive change included:

Safety and security measures need to be continuously enhanced – in consultation with the industry – but key to the success of these measures is the way in which they are delivered. Attention must also be paid to understanding and eliminating the root cause of terrorism.

More care and consideration should be given to issuing travel advisories, and they should be more specific in terms of both geography and the nature of threat in a particular location. They should also be continuously reviewed and updated so as to minimize their impact on tourism, trade and development.

Certain key factors need to be assured to facilitate the growth of Travel & Tourism. These include a favourable government fiscal policy, a climate that is conducive to business – offering incentives for investment – sustained and effective marketing and promotion, and policies that respect the environment and local cultures.

A destination`s Travel & Tourism can also only flourish in open market conditions, so governments should improve access by liberalizing air transport and removing all other barriers to sustainable growth.

There was nonetheless consensus at the Qatar Global Summit that, while governments can do a lot to facilitate Travel & Tourism, at the same time providing much needed infrastructure and human capital, change can only be driven by the private sector. It is up to the industry to:

Harness technology, including the Internet, to drive new business strategies and develop new business and new pricing models.

Understand people as a resource rather than as a cost, and ensure they get the people equation right – in relations with customers and staff, as well as in staff development, training and leadership generally.

Provide a strong value proposition. Achieving this will require tough choices, especially given that old business models do not work any longer.

The key success factors are operational efficiency, flexibility to match the cyclical nature of the industry and branding to combat commoditisation.

Budget airlines and hotels can co-exist with full-service airlines and luxury hotels; the key is proper segmentation of the market and an offer that provides value for money.