Page last updated at 00:15 GMT, Tuesday, 10 November 2009

Tourism sector eyes brighter 2010

By Will Smale
Business reporter, BBC News

Beach in Mauritius
Holiday firms are hoping for a calmer global economy next year

The cold, grey morning in east London was an apt metaphor for the difficulties faced by the global tourism industry in 2009.

With much of the world having been in recession, this year has undoubtedly been a tough time for travel companies around the globe - commercial sunshine has been in short supply.

Put simply, people have been cutting back on taking holidays in the face of the economic uncertainty.

Either due to the direct impact of unemployment, or the wider sense of a need to be more financially cautious, would-be holidaymakers have been much more reluctant to book a vacation - as the latest figures show.

We see discounting continuing throughout 2010, so there will continue to be bargains to be found by holidaymakers
Caroline Bremner, Euromonitor International

A report published this week to tie in with one of the world's largest gatherings of travel industry leaders - the World Travel Market fair in London - estimates that global travel bookings will fall 8% this year.

The situation has been even more challenging for hotels around the world, with the Global Trends Report 2009 adding that their bookings will fall an expected 16%.

At the same time, it predicts global airlines will see a 14% drop in passenger numbers.

'Challenging year'

Against this backdrop, you would expect the thousands of attendees at the four-day World Travel Market at the Excel Arena in London's former docklands to be in despondent mood.

Mike Bugsgang
Mike Bugsgang says the UK travel industry remains 'patchy'

Yet, with hopes high that the global economy is continuing to recover - as born out by countries such as the US, France, Germany and Japan exiting recession since the summer - the atmosphere seemed to be one of relief that the worst of the downturn is now probably over.

"2009 was a challenging year," says Caroline Bremner, global travel and tourism manager at market research group Euromonitor International, which compiled the report.

"We predict that 2010 will be much better, but at the same time recovery will be slow."

While 2009 might have been tough for the travel industry, Ms Bremner points out that it was great news for people who still had the cash to go on holiday - extensive discounting has been widespread.

"We see discounting continuing throughout 2010, so there will continue to be bargains to be found by holidaymakers," she adds.

Ms Bremner says travel firms will have to continue to discount, with unemployment fears remaining a concern as the global jobs market trails behind the wider economic recovery.

She also predicts that holidaymakers will continue to downgrade, which is benefiting lower cost providers - be they cheaper hotels, package holiday providers, or budget airlines.

Deal making

With seemingly every country in the world having its own stand area in the giant exhibition halls, the World Travel Market is a colourful event.

Ecuadorian woman in traditional dress
The various nations at the World Travel Market vied to get attention

From Ecuadorian ladies in their national dress, to ornate flower displays, a life-size waxwork of actress Dame Judi Dench, and more national flags on display than a crowd of excited football fans, each nation proudly vies for attention.

Not open to the public, it is instead a giant opportunity for the global travel industry to network and do deals.

Alongside the tourism powerhouses of France, Spain, the US and Australia, you could find some of the world's less visited nations and regions - such as the Russian enclave of Kaliningrad which, prior to 1945, had been East Prussia - a part of Germany.

Best known for its brutal Stalinist architecture, Kaliningrad appears to be a difficult place to sell to would-be tourists.

Yet Marina Drutman, Deputy Minister for Industry at the Kaliningrad regional government, insists that it has its charms.

"We have some very interesting old monuments, fortifications and castles," she says.

"Kaliningrad is a little bit different than the main part of Russia, more European, more smiling, and we now have very good air connections via Riga [the capital of Latvia].

"We don't get many British tourists at present, but we do get Germans keen to explore part of their history."

'Sporadic disturbances'

Also present at the exhibition is a tourism team from the world's newest independent nation - Kosovo, which declared its independence from Serbia in 2008.

Pristina, the capital of Kosovo
Kosovo is enjoying a rise in visitor numbers

Kosovan tourist official Syzana Baja says the Kosovo War of 1998-99 was very much a thing of the past.

"Visitor numbers are going up, we are a very safe country to visit," she says.

"We have lovely countryside and Kosovan food and drink."

Yet, while the UK Foreign Office says most visits to Kosovo are "trouble free", it cautions against going to the North Mitrovica region due to "sporadic disturbances" between the Serbian minority and Kosovan majority.

A much easier sell is the Caribbean island nation of St Kitts and Nevis, whose representatives said visitor numbers had risen strongly this year, thanks to new scheduled flights from British Airways.

Seeking value

Travel industry expert Mike Bugsgang, managing director of London-based Bugsgang & Associates, said a number of travel companies and sectors had continued to see an upturn in business in 2009.

Caroline Bremner
Caroline Bremner predicts better things for the travel industry next year

"UK holidaymakers have simply been looking for value for money, whether they have been continuing to go abroad, or staying at home - the dreaded staycation word," he says.

"In Europe, companies such as Balkan Holidays [which operates in Bulgaria, Croatia, Montenegro, Slovenia, Romania and Serbia] have really benefited from more people switching to countries outside the eurozone, due to the high value of the euro.

"The cruise line sector has also continued to perform strongly, with the more established firms such as Fred Olsen doing extremely well.

"Simply speaking, the cruise companies have been benefiting from interest rates being at historic lows. The profile of their typical customer is over 55, and with their savings making so little for them, they are choosing to spend their money instead."

Back in the UK, Mr Bugsgang says the holiday park sector has done particularly well as people still want to go away on holiday, but simply spend less on their accommodation.

"The situation for tourism businesses in the UK this year has been patchy, but the more value end of the market has continued to do well, at the expense of some of the more expensive and upmarket hotels," he adds.

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