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“If during the second half of August the necessary conditions for us to meet in China are not yet met, it would probably be necessary to choose another venue. In this regard, I should like to recall that our last General Assembly decided that Greece would take China’s place in case of difficulties” said Mr Frangialli, among others, to TravelDailyNews International.
Q.: Mr Frangialli, after all the negative events since the turn of the century, do you still feel the tourism sector will rebound and if so within what time frame?
A.: Undoubtedly, tourism will again prove its resilience. Crisis are cyclical and we believe that with SARS epidemic we reached the lowest possible level, so the time has come for the tourism industry to come back to normal pace of growth.
As we have learned in the time of most profound crisis of tourism since 11 September, the impacts of the negative events (terrorist attacks, wars, epidemics…) are geographically limited and have a shorter duration than similar events prior to 11-S. Both the industry and the markets have become more flexible and can adapt to the modified conditions in destinations. Some countries, considered unsafe, can get back to recovery sooner after the crisis and we hope that this will be the case with China.
The successive shocks, of different natures but with convergent effects, have not only slowed down the quantitative growth of flows, but have also accentuated or accelerated qualitative changes that had already begun even before the onset of this difficult period.
The slowdown of economic growth and apprehensions regarding travel, especially by air, do not take away the desire to travel, although they do make it more difficult for consumers to fulfil this desire. The fear is real, but it is only relative. Opinion polls, carried out by CNN among others, show that people are more worried about minor travel incidents (losing a passport, theft of a briefcase…) than about terrorism or war!
In spite of all the obstacles and risks consumers may perceive, they will do what they can in order to travel, even if it means reducing their expenditure, changing their destination, postponing their trip, shortening their stay, fragmenting their travels or favouring domestic tourism to the detriment of international tourism. This intrinsic resilience of travel consumption and the existence of latent demand that expresses itself as soon as circumstances allow, constitute grounds for reasonable confidence, if not optimism, with regard to a sector that on numerous occasions throughout its history has proven its ability to react and its capacity to bounce back.
The expectation of conflict in Iraq during the several months before the start of military operations did more damage than the actual fact of the conflict itself. Tourism consumers and enterprises are just like other economic operators; when turbulent times are on the horizon, they put off their decisions because there is nothing they dislike more than uncertainty. The Iraq conflict, even before it had begun, had already had a negative impact on our industry in the last few weeks of 2002 and in early 2003, by fuelling fear, creating a wait-and-see attitude, discouraging bookings, and delaying investment plans.
With the relatively brief duration of the military operations, a clarification is already under way, a fact that has been reflected by the evolution of the financial and oil markets. However, just when the horizon seemed to be clearing up and as consumers and investors alike were set to make decisions that they had postponed until then, a new source of uncertainty of a different kind appeared with the outbreak of SARS. Because of this, the prospects for recovery of world tourism activity, which was expected to be seen by the summer, and which will still happen in certain regions, slipped further away once more.
Q.: Although it appears the SARS outbreak is beginning to dissipate and especially within China, are you still intending to hold your general assembly their this autumn or have you selected an alternative destination?
A.: The most recent information provided to the WTO Executive Council by the Chinese delegation was reassuring. The epidemic has been absent for some time in several provinces that it had affected, it is abating throughout the country, and at the time of this writing, no new cases of SARS have been reported in the country for several days. I also wished the official information from the Chinese Government to be complemented by that from the World Health Organization. In two reports, one issued from its Headquarters and the other by its Representative in China, this Institution, whose impartiality is beyond doubt, while underlining the unprecedented and thus unpredictable nature of this new disease, gives a relatively optimistic prognosis. It expects that the recommendation it has issued against travel to Beijing and to certain other regions of China will likely be lifted by mid-July.
These reports, while positive overall, should not lead us to relax our vigilance. Bringing together hundreds of participants from most of the countries of the world constitutes a responsibility. We cannot allow ourselves to take the slightest risk with regard to the health of our delegates and officials, or to be at all responsible for spreading the epidemic to other countries.
It is also important that the Assembly be a complete success, that it not run the risk of being cancelled at the last minute, and that the number and quality of the participants be at least equivalent to those of past sessions.
For statutory as well as practical reasons, it is important that the decision be taken at least three months before the start of the Assembly. I therefore proposed to the Council, and it has agreed, to refrain from making an immediate decision, but rather to mandate a group composed of its Chairman (Russian Federation), the host country (Spain), and the Secretary-General, to decide in mid-July whether or not to meet in Beijing on the planned dates in October, based in particular on the information received at that time from the World Health Organization and from the governments.
If the restrictions currently in force have been lifted in mid-July, it would mean that no new cases of SARS have been reported for at least one month, and we would still have a safety period of three months before our meeting. If, on the contrary, the situation has not cleared up fully at that date, plans will undoubtedly be made to keep the session in Beijing, but moving it to a later date, in all likelihood, sometime in early December.
Finally, if during the second half of August the necessary conditions for us to meet in China are not yet met, it would probably be necessary to choose another venue. In this regard, I should like to recall that our last General Assembly decided that Greece would take China’s place in case of difficulties. It would then be up to us to ask Greece, which has been informed, if it is ready to host us, and if not, to choose another country, which should not be too difficult.
Q.: With the SARS outbreak we saw a very close and substantial cooperation between local health ministries and the World Health Organization, which helped lessen tourism repercussions. Could such a close and beneficial cooperation exist between your national tourism organization members and the World Tourism Organization?
A.: Close cooperation between the WTO and its Member-States are a central point of the Organization’s mission. Activities of our sections and programmes are based on the members’ interests, while a special attention is given to the WTO’s leadership in the field of travel and tourism. A number of new members, that have recently joined WTO, proves this fact and confirms a need for an even closer cooperation. This could be even more successful if some important tourism leaders, non-members, joined the WTO, such as Australia, United States of American and United Kingdom.
Q.: Due to the severe results such scares create for the tourism sector, would it be plausible for the WTO to work more closely and cooperate with the World Health Organization concerning recommended travel restrictions so as they may be no more than strictly required to protect citizens?
A.: Our cooperation with the WHO during the SARS epidemic proved to be very useful. We have used WHO as a source of non-biased data, which helped as a lot for implementation of our actions for mitigating the crisis in East Asia, caused by this new illness. We understand the interest of governments and some international organizations, which want to protect citizens and travellers to certain regions with issuing travel warnings, however, we claim they should be implemented according to the Code of ethics, in order to avoid negative consequences for the destinations, which have not experienced any negative events (such as illnesses, wars or terrorist threats). On the subject of travel advisories, WTO is planning a meeting between senior representatives of Foreign Offices in the main tourism generating markets and those from countries which feel they have suffered unfairly from travel warnings, to help clarify the procedures for issuing an advisory and for getting one lifted.
Q.: Has the WTO any plans to work with national tourism organizations in an effort to create some guidelines for emergency situations, such as possible epidemics, terrorism attacks or even war? Would you explain what sort of outcome has been forthcoming from the WTO’s crisis committee, if any, and whether or not you believe it should be a permanent part of the WTO in order to confront both small and big tourism problems in member countries?
A.: Details of a new four-point plan, the WTO Crisis Management Strategy, to help member countries overcome current problems and deal effectively with future crises, was presented to the Tourism Recovery Committee at its fourth meeting held in Berlin during the ITB travel exhibition in March. It includes Publication of “Crisis Guidelines for the Tourism Sector, the formation of a Crisis Action Team, a high-level Meeting on Travel Advisories, and joint projects with IATA and APEC-CRC. “Crisis Guidelines”, offer a one-stop reference document, which suggests specific actions to take before, during, and immediately after a crisis—to get tourists returning to a destination as quickly as possible. WTO has included crisis management in many seminars and offers advice on techniques in several of its publications.
The Crisis Action Team has been formed from a group of 11 of the world’s top experts in the area of communications, marketing and promotion and safety and security, who have agreed to help member countries hit by a crisis. Of the two joint projects, one is to organize crisis communications seminars with IATA, offering the opportunity for tourism and airline personnel to be better prepared for cooperation during a crisis. The other is with the Asia Pacific Economic Council (APEC CRC) tourism research centre and PATA on the preparation of a crisis management manual, which will look at best practices and lessons, learned from recent crises in the region.
For the time being, we shall keep the Recovery Committee as an informal advisory body to the WTO. We believe the Secretariat can successfully manage its activities and see no need for yet another formal structure. We see with satisfaction, though, that there came to similar meetings also on regional levels, which proves a need for close cooperation and exchange of information, nevertheless also the correct path of the WTO guidance.
Q.: Has there been any further progress made concerning the WTO being a cooperating party of the United Nations? What are the major benefits of being an intergovernmental organization in charge of tourism within the UN system?
A.: The recently finished 70th session of the WTO Executive Council approved the agreement between the World Tourism Organization and the United Nations for a transformation of the WTO into a UN specialized agency.
The agreement between the two organizations was prepared by the WTO and ECOSOC negotiations committees, chaired by Peru and Jordan, respectively. The UN counterpart, Economic and Social Council (ECOSOC), will meet in July in Geneva to – as expected – also approve the agreement between the United Nations Organization and WTO. The document will finally have to be adopted by the two highest governing organs – general assemblies – which have their sessions scheduled in the fall of 2003. This will conclude a process that began in 1969, through a resolution of the UN General Assembly calling for the constitution of an inter-governmental organization, in charge of tourism, within the UN system, followed in 1977 by an agreement through which WTO became a UN related agency. While WTO’s transformation will constitute a giant leap forward, it stand to be achieved without the need for any change of our Statutes, nor any increase in Members’ contributions, nor even additional full time staff. On the other hand, the benefits are there to see, namely: recognition, effectiveness and impetus.
Recognition, because it simply acknowledges the fact that travel, leisure and tourism now constitute a powerful part of modern society that cannot be ignored.
Effectiveness, because, transforming the WTO into a specialized agency would mean greater coherence by increasing the synergies among those different stakeholders and enhancing the coordination carried out by ECOSOC.
And impetus – because we expect to achieve greater visibility that would prompt governments as well as multilateral institutions, especially the Bretton Woods institutions, to pay increased attention to an industry that brings development.
Put simply, specialized agency status brings WTO much closer to the bigger agencies that can help us pay travel and tourism the attention they deserve.
Q.: We have heard much talk in the past years about the WTO’s satellite account method for tourism statistics. Is there some sort of a deadline for implementation of such once a country agrees to adopt the method? How many WTO members use the method, and could adoption be a prerequisite for being a member of the WTO?
A.: TSA is a new instrument supported by the United Nations for the measurement of nationwide tourism statistics. Since 1985 WTO initiated to rise awareness about the need for a “satellite” approach of tourism in relation to national accounts, that is, an instrument sharing concepts, definitions, clarification, and aggregate with National Accounts. The development of TSA is up to each country as other types of Satellite Accounting (education, health, environment, etc.).
Right now, around 40 countries have already a TSA or are in the process to develop on in the next two years. Australia, Canada, Spain and the United States are some of them, but a lot of others, like China, Mexico, Korea, the Philippines, Malaysia, Namibia, etc. demonstrate that TSA is seen by very different type of governments as a useful tool for tourism policy design and analysis.
Q.: At the final European Union meeting to be held here on June 20 do you expect to see a common tourism policy added as part of the Union’s new constitution? If such is adopted, do you believe it would be a boon for tourism in general and in particular for the new members of the Union?
A.: For the time being, in spite of all our efforts, tourism has not been introduced as a competence of the European Union in the draft Constitution adopted by the European Convention, chaired by ex-president of France, Mr. Valéry Giscard d’Estaing. I have sent him a letter in February, in which I informed him that some European parliamentarians have brought to the attention of the WTO the importance of explicitly mentioning tourism in the draft Constitutional Treaty. This appeal is in line with the position that has been repeatedly expressed by our Institution, which believes that the lack of European Union competences in tourism, and consequently, the absence of any wide-ranging action in this field, is detrimental to its tourism industry.
Although Europe still dominates world tourism, it is steadily losing market share. The percentage of international tourist arrivals that is received by Europe has decreased by seven percentage points over the past twenty years. According to WTO projections, this trend could continue, with Europe’s share decreasing to 46 per cent in 2020, from 58 per cent last year. On the other hand, competing destinations are giving increasing importance to tourism, East Asia most notably, but also countries such as Australia, Canada, Mexico, Turkey, Egypt … The efforts made by these countries with regard to tourism investment and promotion have effectively placed European destinations at a competitive disadvantage, thus reducing their capacity to generate activity and employment.
For all the above reasons, we believe that the European Union – especially after its enlargement to include countries with great tourism potential – would be missing out on an important opportunity if it were to take an interest in a sector that is crucial for its economy and its society. The interdependence between tourism and the other policies that the draft Treaty considers to be matters that should come under the Community’s purview, and the importance of the stakes involved therefore constitute grounds for the inclusion of this sector within the scope of the Union’s competences. Such an inclusion could be implemented under the heading of shared competences in Article 12, based on the close interrelation between tourism and areas such as the internal market, the environment, or transport, which are mentioned in the draft article. The other option could consist of mentioning tourism under Article 15, whereby the Union may take on a coordinating, complementary or supporting role with regard to policies carried out at a lower level. Tourism’s parallel relationship with industry and its affinities with culture, both being areas that are mentioned in the draft of Article 15, constitute arguments in favour of this second solution.
Inclusion of tourism in the European Constitutional Treaty will not necessarily mean booming of the European tourism or in particular in the new EU members. A lot more will have to be done in the field of product development and promotion; however, it may result in a much higher awareness of tourism for the economic development, especially for the new EU members, thus countries with great tourism potential.
Q.: Greece’s travel agents’ association — and later the pertinent government tourism ministers — recently signed a tourism cooperation agreement with eight of its Balkan neighbours. Do you believe this type of cooperation is viable for the area concerning its hopes to attract inter-country visitors and third-country visitors to a single destination?
A.: I believe the formation of a single destination by a neighbouring countries can contribute to a stronger position on the international market. It expands the range of products, thus adds to their variety, which gives even more reasons for visiting them and connects venues for different sub-sectors, e.g. cultural heritage, sports, pilgrimages, etc. which are in different countries.
Examples in Scandinavia or the Caribbean have proven this to be a very good marketing solution, since such a connected region can easier attract tourists from distant, overseas markets.
I am glad that the Balkan countries decided to take this step, because of the peninsula’s dramatic history, full of wars, ethnic conflicts, hatred, thus I wish a great success in this endeavour. Tourism has a chance to again prove to be the powerful tool for reconciliation, cooperation and an agent of development, job creation and social, not only political and economic harmony.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
