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Key issues and trends at World Travel Market

Report – WTM2005: World Travel Market has for over twenty six years acted as a barometer for the global travel and tourism sector…

Report – WTM2005: World Travel Market has for over twenty six years acted as a barometer for the global travel and tourism sector as the future direction of the industry is debated, discussed and shaped.

Outlined below is snapshot of the key findings unveiled in the World Travel Market UK & European Travel Report in association with IPK International.

European growth forecasts

European inbound and outbound tourism is expected to grow by 4% in 2005, in terms of trip volume, and by 2-3% in 2006.

The growth in international tourism receipts and expenditure on travel will be slightly lower due to the forecast continuation of the trend for shorter, but more frequent trips.

The industry can no longer expect a `normal` year for travel and tourism. Terrorism, natural disasters, health crises and other challenges are here to stay.

Major events in Europe, such as the FIFA World Football Cup in Germany and the Winter Olympics in Turin, Italy, should boost tourism in 2006. But past experience has shown that big events often have the opposite impact.

Purpose of travel

Leisure travel continues to be the main driver of growth, thanks in large part to the no-frills airlines, with city trips/breaks expected to increase their dominance of the European short-haul market.

Business travel is recovering, but there are big changes in the market. Decisions are increasingly being taken by financial rather than marketing directors, and there are signs that the value of business tourism is declining in some countries.

Incentive travel is increasingly combined with business meetings to justify costs, save on tax and maximise employee motivation.

No-frills airline travel

Low-cost/no-frills airlines have changed the face of the industry and are now one of the major factors dictating how European countries perform as tourism destinations.

Airports with no-frills airline services are expanding their catchment areas, since low-fare travellers are prepared to travel longer distances to/from airports to save costs.

Countries without low-cost/no-frills airline services risk looking less attractive to holidaymakers and investors.

But there are downsides. No-frills airline services are attracting growing numbers of inbound visitors to traditional and emerging tourism destinations but, since they tend to stay in the cities, outlying rural areas are losing business. At the same time, more and more nationals from central/Eastern Europe are taking advantage of no-frills airlines to travel abroad, so domestic tourism is suffering.

Impediments to tourism growth

Visas continue to be a major impediment to growth – not just the requirement for visas, but also the lengthy bureaucratic procedures and high costs involved in obtaining visas.

Increased online booking has resulted in tour operators in some markets downsizing their hard copy brochures. And this has primarily affected smaller destinations in Europe that have been dropped from the brochures.

Messages for NTOs

It is time to start talking of the ‘visitor economy’ rather than simply the tourism business, so as to communicate better the potential economic contribution of travel and tourism to politicians and the public.

Even markets showing declines or stagnation over several years – such as the USA and Japan – offer growth potential from some segments, but more research and more targeted marketing is essential to tap the opportunities.

The new European Tourism Destination Portal, which will be launched in 2006, will provide a platform for the European Travel Commission’s e-marketing and enhanced customer relationship marketing by its members. But it will also, hopefully, encourage greater co-operation between NTOs and between the public and private sectors of travel and tourism.

Although there are several examples of co-operation between European countries and regions on an ad hoc basis – such as between the Alpine regions, in the Tirol and Lapland – the three Scandinavian countries are the only ones to have set up permanent offices together abroad. The signs are that other NTOs are looking to follow suit in order to find more cost-effective ways of entering new markets.