Following Thursday`s bombings in London the World Travel & Tourism Council Crisis Committee was immediately convened to discuss the events and the potential repercussion on…
Following Thursday`s bombings in London the World Travel & Tourism Council Crisis Committee was immediately convened to discuss the events and the potential repercussion on Travel & Tourism in the UK and elsewhere. The Committee commended the highly efficient reaction of the rescue services and underscored the seriousness with which the UK authorities had prepared for such an event. The Committee unanimously agreed that early indications showed that the impact on the UK`s Travel & Tourism industry would be limited. Travel & Tourism companies have recovered their stock value within 24 hours of the attacks, reflecting the confidence in the industry.
The Committee concluded that:
- The intensity of the event`s affect on international arrivals, residents` Travel & Tourism consumption confidence and Business Travel confidence should be minor.
- The duration of the event`s affect on International arrivals, residents` Travel & Tourism consumption confidence and Business Travel confidence should be limited.
- The geographical reach of the event should be limited to the UK.
- The damage to the Travel & Tourism infrastructure was none.
- The UK government spending response to the event should and would be strong.
In light of these factors, the WTTC Crisis Event Forecasting Model developed by Oxford Economic Forecasting was engaged for the first time since it`s launch at the WTTC Global Tourism Summit in Delhi in May 2005. The Crisis Event Forecasting Model suggested that in 2005:
- UK visitor arrivals may decline by approximately 588,000 from previously forecast levels (30,947,368), a decline of 1.9 per cent.
- Personal Travel & Tourism by UK residents may decline by GBP2.3 billion, a loss of 2.3 per cent from previously forecast levels (GBP102 billion).
- Business Travel & Tourism by UK companies may decline by GBP523 million, representing a loss of 2.3 per cent previously forecast levels (GBP 22.7 billion).
- Government Travel & Tourism expenditures may increase* by GBP470 million, representing a gain of 6.3 per cent over previous forecast levels (GBP 12.6 billion).
- Visitor Exports may decrease 1.9 per cent or GBP386 million from previously forecast levels (GBP 34.9 billion).
- Travel & Tourism Industry GDP may decrease 2.0 per cent or GBP927 million from previously forecast levels (GBP46.8 billion).
- Travel & Tourism Economy GDP may decrease 1.5 per cent or GBP1.9 billion from previously forecast levels (GBP122.5 billion)
- Travel & Tourism Industry employment may shrink by 0.49 per cent.
- Travel & Tourism Economy employment may reduce by 0.55 per cent.
*It is not unusual for government spending levels to increase during a period of crisis as a result of increased activity, security and ultimately renewed marketing and promotion to re-engage visitors.
Jean-Claude Baumgarten, WTTC President, said It is expected that the impact of the London bombing, much like that realized by the Madrid and Bali bombings will continue into 2006 but will have completely dissipated by 2007. Of course this assumes that UK authorities undertake at least similarly strong measures of reassurance and encouragement to regain and rebuild visitor confidence and that no further events take place in the meantime.
Please note that the WTTC Crisis Event Forecasting Model and the estimates it produces are limited by the historical database and simulation of previous events used in the analysis (see below) and the assumptions used to assess the current situation (see above). There is no guarantee or assurance that the estimates will materialize as suggested. It is for this reason that WTTC strongly recommends that these estimates be considered as one piece of information and reference, among many, that are used to guide government policy and business decisions during the reaction, recovery and rebuilding period…
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