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Tuesday, 13 November, 2001, 10:36 GMT
Travel expert Graham Wason
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The travel and tourism industry has suffered heavily since the US attacks and is poised for further setbacks after another air disaster in New York.

The issue is certain to be on the minds of the industry leaders who will meet in London at the World Travel Market.

Passenger numbers have fallen and tourist attractions all over the world are losing money. Two European airlines have already been declared bankrupt and thousands of jobs have been lost all over the world

But what happens now?

The World Travel and Tourism Council is the global forum for business leaders in the industry. Their vice president for strategy and development is Graham Wason.

How will the industry bounce back? Which countries will continue to suffer the most? Are the days of last minute bargain holidays and flights numbered? Should governments be trying to help the industry get back on its feet?

Graham Wason joined us for a live forum.


Transcript:


Newshost:

This week leading figures from the travel and tourism industry are meeting in London to discuss the crisis facing the industry following the events of September 11th. The event was organised of course before today's news from New York that an American Airlines A300 Airbus crashed shortly after taking off from JFK airport.

We should stress that at this stage, the cause of the crash has not yet been established. It is not known if this was a further act of terrorism and it is of course possible that it could have been an accident - mechanical failure perhaps. But clearly the loss of another airliner in New York is of course of great anxiety. So Graham before we look at the emails, perhaps I could ask you first of all for your reaction to this tragedy?


Graham Wason:

Terrible, terrible news. We don't whether it is another act of terrorism or whether it's just pure mechanical failure, so it is difficult to speculate. But whatever reason, it is more terrible news for an industry that's already been battered by recent events.


Newshost:

Either way, if it's an accident or if it's a deliberate act, it is going to make the travelling public even more jumpy isn't it?


Graham Wason:

It's bound to do that. I think people are more nervous than they perhaps ever been before of international travel - particularly of getting on aeroplanes. It really is a terrible time for people and the reaction when these awful things are happening is for people to stay at home and of course in a way that's exactly what we don't want to happen. We want people to have confidence to be able to travel and to exercise their normal right to travel and to do business and to meet family and friends and so on.


Newshost:

Can you give us an idea of how hard the industry worldwide has been hit since the events of September 11th ?


Graham Wason:

It is difficult to quantify it exactly but we know from various bits of evidence - in the second half of September, for example, US air traffic was down by 35% and air traffic throughout the rest of the world was down by about 20 - 25%. Now that is a massive fall in demand and that is what's caused such a hiatus in the international air industry at the moment and of course that has led to severe job cuts as we've seen in the press.


Newshost:

We've heard of course of airlines going out of business with some travel companies already are reporting a drop in bookings. It sounds like a pretty bleak time for the industry as a whole. What's the mood amongst your fellow professionals who are meeting in London?


Graham Wason :

It's a difficult time of course and we've never faced anything quite as bad as this and at the same time as falling demand there are also increased costs. There are extra costs of insurance, extra costs of security to be met. So it really is extremely difficult times indeed. I would say that the mood is mixed - there are those who are confident that the industry will bounce back as it has done in the past but at the same time current conditions are really appalling. It is essential that we get Government and industry working together to try and restore confidence in the minds of our travelling public.


Newshost:

Manos Bairaktaris, Greece: Do you believe that the "struggle against terrorism" attitude of the US government is responsible for the lack of confidence of travellers? Should they modify the content of their statements in order to help the recovery of the travel and tourism industry?


Graham Wason:

That's an interesting question. I would say it isn't the reaction of the United States Government that has been responsible for the loss of confidence. I would say that's been directly the result of terrorist activity and the awful things that happened on 11th September. However, to restore confidence, what is necessary now is for governments to undertake measures to ensure that security is absolutely as tight as it can be, that systems are stringent, that they are applied universally around the globe and then to convey that to the travelling public.


Newshost:

I think perhaps what the questioner might have in mind is the fact that this could well continue for some time.


Graham Wason:

I think it could and a lot of people have compared the present crisis to the Gulf War. Well, the Gulf War took about 12 to 18 months for recovery to occur - it could be even longer in the present crisis because of the declared global war on terrorism, because of fears about other issues like anthrax which of course might be unrelated but coming right on top of this it's all compounding people's fear.


Newshost:

You mentioned the Gulf War - that clearly had a big effect on travel 10 years ago. Just reminds us - did companies actually go out of business then? Is it potentially on the same scale as this time?


Graham Wason:

I think it wasn't quite the same scale and the drop in business in the year after the Gulf War was about 1% or so. Some analysts have suggested that the drop in air traffic could be 10% next year. If it is that scale then certainly, as you say, we've seen some airlines go out of business and the chances are that others could do so too. So it really an essential time for everybody to pull together to do what we can because without a global airline industry it is not just our holidays that suffer, it's our business - the total economy is fuelled by travel and tourism activity.


Newshost:

James Cook, UK What measures are being taken to reassure the business community at home and abroad that air travel is safe?


Graham Wason:

I think the United States have led the way rather and it's interesting that the question comes from the United Kingdom because I've been a little bit disappointed that the UK Government hasn't yet done more in the wake of a serious of disasters that the UK travel and tourism industry has had this year. At least the US Government led by President Bush, has been trying to persuade people to have confidence again in travel. They have introduced measures going some way towards trying to resolve the crises, not just in terms of the much talked about financial assistance to support their airline industry, but also in terms of a tax break offered to UK citizens to encourage them to travel again. I think they're positive measures and I would like to see those measures carried out by other governments around the world.


Newshost:

Shirley Jones, Manchester, UK: What measures do you think will need to be taken to restore confidence in the travel industry? Are airlines doing everything they can to make travel safe?


Graham Wason:

I think airlines are doing everything they can. They've looked very, very careful at what is within their control in terms of safe doors, for example, between the passenger cabin and the pilot's cabin. They've looked at the whole question of whether they should have armed pilots, they've introduced, in some cases, their own armed guards who go incognito on flights. So I think airlines are probably doing as much as they can. What's needed though is to make the whole aspect of travel much more secure and of course that's fundamentally down to the gateways and the security of passengers before they actually board the aircraft and I think that's where much more work still needs to be done.


Newshost:

You mentioned the potential damage to the industry as a whole. Monica, Glasgow, UK wants to know: Do you expect any more airlines to go out of business in the next few months? We heard of yet another airline at the weekend - a Canadian airline - filing for bankruptcy.


Graham Wason:

I think the potential is there, sad to say. We've seen much publicised problems at Sabena and Swissair. Sadly, I think others will face problems as well. So it is absolutely essential because airlines are so fundamental to all economic activity, it's really essential now that everybody pulls together, does whatever we can to improve security and then to persuade the public that it is as safe as reasonably can be to travel. Then we can rescue our airlines and rescue the whole of our economies.


Newshost:

I think some people were surprised how quickly this started to hit the airlines after September 11th. Louise, San Francisco sends this email: How many more thousands of people in the industry do you think will lose their jobs because of the downturn in travel?


Graham Wason:

Of course that is impossible to predict. We at the World Travel and Tourism Council, undertake macro economic research every year and we have a detailed model and we have put into that model the scenario of what would happen if demand drops by 10%. Now it has dropped by more than that in the United States in September. But if that drop of 10% occurred for 12 months following the 11th September that would be something like 1.1 million jobs lost in the United States. If that happened throughout the world, it would 8.8 million jobs lost as a fall of 10% in demand - that's horrific and that's because the travel and tourism industry generates so many jobs for so many people throughout the world.


Newshost:

Staggering numbers. Just looking at the airlines, people have been speculating that we could end up with a lot fewer airlines than we have now or a few weeks ago.


Graham Wason:

I think the airline industry is going to have to change in some ways. It has been changing of course anyway. We have seen great growth in budget airlines. What I would say to your audience is that now is the best time to travel. Security is tighter in the majority of places and there are fantastic deals to be had - not only on traditional carriers but on budget airlines as well. Now is a great time to travel - be confident and do so. Despite all the awful things that have happened in recent months, travelling by air is still statistically far safer than climbing into your own bath or walking into your kitchen at home.


Newshost:

Sanjay, Liverpool, UK: Do you think airlines will keep the planes on the ground which they took out of service after the attacks. Are there going to be fewer flights in general from now on?


Graham Wason:

Travel and tourism is a very strong and growing sector - the continued growth, if you look over the past 10, 20, 30 years has been very, very powerful. Terrorism has been around for many, many years and I am quite convinced that travel and tourism will grow in the medium to long-term. But I think we are going to have a very difficult period of one or two years and then I believe that the industry really will bounce back again.


Newshost:

Has it been possible to gauge the public's response to some of the things that have been done already e.g. extra security on the ground, armoured doors between the cockpit and the cabin? Is the public convinced that enough is being done?


Graham Wason:

I think it has to be fair to say that so far they are not convinced and of course as soon as another tragedy, like today, happens then whatever efforts have been taken all go back to the drawing board again. Until we know exactly what the cause was and if the cause is not terrorism, people do understand that mechanical failures do occur, tragedies do happen. Fortunately, those tragedies are extremely rare and hopefully with time, people will understand those statistics and begin again to have confidence to travel.


Newshost:

We have been talking about the airlines because the impact has been immediate in terms of lost jobs. But of course there are many other companies in the travel business in the UK and throughout the world who depend on tourism. Is it too soon to make any forecast for what the next holiday season is going to be like?


Graham Wason:

If we take a quick look at what has happened to those other sectors of the travel and tourism industry since the 11th September, I should say that they have all been affected - hotel business has been down, city centre hotels have reported occupancies falling by 40 or 50%, travel agent business is down - all sectors are down. Now demand was already coming back after the immediate aftermath of 11th September - it is difficult to say how much it is going to be down next year, the projections are that it is likely to be down but hopefully not too much. Let's hope that the travel and tourism industry around the world will bounce back and not be far below the results it was achieving up until 11th September.


Newshost:

Clearly you and other people in the industry must be very concerned about potentially even further damage being caused by today's events in New York whatever the cause of this crash.


Graham Wason:

We are extremely worried. Of course the direct worry is for the families concerned in the tragedy. But immediately after that, so many hundreds, thousands of people are affected by those tragedies - the relatives of people, people working in aircraft themselves, the stewards, the pilots, everybody who works in the airline business of course is indirectly affected by a terrible tragedy like this. Then beyond that it is business people, families and everybody else who needs to travel just to fulfil their right of enjoying the planet.


Newshost:

To end on a positive note - do you think the industry can rebuild and perhaps in a year or two be back to where it was before?


Graham Wason:

It can indeed. The industry is full of tremendous entrepreneurs. It's a young industry full of many small entrepreneurial companies - it will certainly bounce back. The people at World Travel Market today - from where I have just come to join you today - there is a very bullish and aggressive mood there - people are doing business, people are intent on getting the world moving again and building a sustainable travel and tourism industry for the future.

See also:

09 Nov 01 | Business
Canada 3000 suspends flights
09 Nov 01 | Business
Tourism slump stretches to 2005
02 Oct 01 | Business
Nervous tourists cancel trips
18 Sep 01 | Business
What now for tourism?
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