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10 million fewer tourists visiting the Mediterranean countries
The World Travel and Tourism Council (WTTC) has announced that 10 million fewer tourists visiting countries like Greece, Spain and Portugal will have a devastating effect on local jobs and businesses. It forecast a 14 billion euros loss of income for the region. The arrival of tourists along the Mediterranean coast is down this year by 10%. This figure tops the worldwide slump of 8%.

A number of analysts are predicting that the situation can only get worse as the real effects have not yet been felt. The long term effects on fiscal balances, consumer spending and economic growth are still to be seen.

A strong Euro has not helped matters. The relatively weak dollar, pound and Russian ruble meant that Europe has been losing traditional customers to countries outside of its borders.

The regions governments are trying to help the ailing tourism industry with stimulus packages. Italy has announced an injection of 1.6 billion euros and Spain has announced it will provide support with a second package of 1.3 billion euros. Greece has also introduced subsidies forecasting that although the industry will stagnate this year, it will get better next year.

Credit-rating agency, Standard and Poor’s Mark Mrsnik says that the eventual impact of the tourism crisis will become apparent in many sectors and have “a variety of consequences.” He points out that, “these include employment consequences, consequences on the creditworthiness of households and companies in the sector and their ability to pay their debts, and it will certainly have an impact on government revenues.”

Thanks to online.wsj.com for the above quotes, for more information on this article please visit their website. Tatiana Rokou - Thursday, August 13, 2009