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Economic crisis dominates world's leading tourism fair

(Xinhua)
Updated: 2009-03-11 15:35

BERLIN -- The world's leading tourism fair ITB opened here on Tuesday as exhibitors met to discuss the challenges the industry is facing amid the economic downturn.

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More than 11,000 exhibitors are participating in the fair to show off their latest offerings in the travel sector. However, the week-long event is also more like a crisis meeting, as the industry like other others, has been hit by the financial crisis.

"Hard times lie ahead for the world's travel industry," David Ruetz, chief organizer of ITB said, noting that 2009 will be a year of stagnation for the industry, at best.

"In all likelihood the downturn in the industry will continue before things improve again. Nor are signals for 2010 encouraging, " Ruetz said.

According to a study by GfK market research, many families in Germany are very cautious about planning their holidays. Bookings have decreased by 14 percent, compared with the same period in 2008.

Bookings by couples have declined about 2 percent, and only singles are traveling as before.

The German Travel Association (DRV) said "all inclusive" offers are booming because people want to know exactly how much money they will have to spend.

Leisure travelers are also preferring "last minute travel" and business travelers are switching from business to economy class flights and more and more travelers are seeking low-priced "budget hotels."

Germany's hotel sector is expecting losses of about 5 percent in 2009,  Fritz Dreesen, chairman of the German Hotel Association (IHA), said.

Up to 20.000 people in the hotel sector could lose their jobs due to the crisis, he said. Last year the number of employees slightly increased by 0.2 percent to 360.000.

Still, there are signs that the majority of Germans will not stop traveling altogether.

During the current winter season ending in April, the tourism industry estimates an increase in sales of about 7 percent.

According to a recent survey done by ADAC, Germany's biggest Automobile Club, 65 percent of its members were planning at least one holiday trip in 2009.

The survey concluded that the Germans were not likely to scrap all their travel plans, but most were likely to travel only once a year.

The number one destination for German tourists in 2008 was Spain with roughly 10 million visiting the country. Turkey, Italy and Greece were also top destinations.

The survey found that due to the reduction in foreign holidays by the Germans, domestic tourism could increase two percent this summer.

As the global economic climate remains unclear, concerns are the industry may get worse before it gets better.

"Unemployment will increase and at the moment, nobody knows when the recession will be over," Manny Fontenla-Novoa, CEO of Thomas Cook travel, said.