WTO World Tourism Barometer Rising, Iraq and SARS influences not yet overcome

International tourism results generally have improved over the past four months. But while many destinations are showing clear signs of a revival of demand, it will still take some time to overcome the damage caused by the Iraqi conflict and Severe Acute Respiratory Syndrome (SARS), explains the WTO World Tourism Barometer.

According to the second issue of the WTO World Tourism Barometer, which was presented at the World Tourism Organization 15th General Assembly in Beijing some days ago, trends still vary. As some parts of the world suffered more than others, so recovery in these regions is taking longer.

In the first four months of the year, results were influenced by the Iraqi conflict and from April onwards by the emergence of SARS. While travel confidence was gradually restored after the war, it was further dented by terrorist attacks in Riyadh, Casablanca, Jakarta and Mumbai. "However these had far less impact than expected as the public seems to have grown accustomed to living in an unsafe world," said WTO Chief of Market Intelligence and Promotion, Mr Augusto Huéscar.

According to the data available on arrivals for more than one hundred countries, most destinations have made headway in overcoming the damage caused by the Iraqi war and SARS. The some 140 members of the WTO Panel of Tourism Experts confirmed there were positive trends in the market and remained optimistic for the remainder of 2003. Growth expectations ranged from "equal to better than might reasonably have been expressed." The panel rated prospects for the coming four months at an average 3.6 on a scale of one (1) to five (5). Expectations have clearly improved in Asia and the Pacific (4.0), and are also higher than average in Africa and the Middle East (both 3.8).

Positive growth is expected over the last four months of 2003, the WTO Panel of Experts said, in line with the projected improvement in the world economy, sparked by renewed confidence in the United States. According to the Panel, even after the war and SARS were over, the feeble state of the economy continued to be the major obstacle to a faster recovery in world tourism.

"The fall in outbound tourism persists in some important markets while pressure from consumers seeking "better value for money" has intensified competition between destinations and companies," Mr. Huéscar added.

Results by Region

Europe

With the ghost of economic recession over some of the most important generating markets, results for the first eight months are not particular buoyant. Of the more important European outbound markets, Germany Netherlands , Switzerland , Austria , Sweden, Denmark and Belgium , all show decreases in their expenditure on international tourism for the period over which data is available. This circumstance can be clearly seen in the results of most of their favourite holiday destinations. Also, Europe experienced a long and unusually hot and dry summer, which affected the traditional summer flow from North to South, with more Northerners staying at home or closer to home. On the other side of the spectrum are France and Italy, both spending 4% more in the first half of the year. In Northern Europe, the United Kingdom and Ireland escape from the general trend. The United Kingdom is, in fact, one of the brighter spots in Europe, both in terms of inbound and outbound tourism. The country recovered from the bad figures of the war months and ends the period of January to August almost equal to 2002 in terms of tourist arrivals. Some of the sun and sea destinations such as Croatia, Slovenia and Turkey achieved particular good results in their summer season, partly due to the current exchange rate for the euro, which makes holidaying outside the euro area more price competitive.

Americas

Although the months following the Iraq war and the SARS outbreak show some alleviation, North America still has to recover an important part of the losses suffered. In the seven months till July the United States was still 7% down on the same period last year. Canada, hard hit by the travel advisories issued regarding SARS by the end of April, showed double-digit drops for all months, particularly profound in the month of May. It ends the period with decrease of 15%. Mexico started to recuperate from the severe decline in arrivals from the United States during the war in Iraq and recorded positive figures in June and July, but still faced an accumulated loss in arrivals of 8% till August.

For the remainder of the region the situation is much brighter, with the majority of destinations in the Caribbean and in Central and South America presenting generally positive and in some cases very positive figures. Benefiting from the weaker US dollar, making most destinations cheaper for European and Canadian consumers, and from some traffic replacement from Asia due to SARS, the Caribbean confirms its steady recovery from the 2002 negative results. Some of the major destinations recorded particular good results, such as the Dominican Republic (+20%), Cuba (+14%) and Jamaica (+7%), while Puerto Rico (+3%) and the Bahamas (+2%) were also on the positive side. Likewise, Central and South America succeeded in maintaining the momentum of the first four months of 2003. As political and economic stability in major intra-regional generating markets was reinforced, particularly in Argentina and Brazil, countries in the region like Chile, Peru, Uruguay and Ecuador all prospered. Argentina, benefiting from the  competitive price advantage, managed to continue the positive trend initiated in 2002 and presents a substantial 27% increase in arrivals at its major air and water entry points in the period between January and July.

Asia and the Pacific

With the exception of South Asia, tourism performance in the majority of Asian destinations has been almost completely determined by the outbreak of SARS. Most countries in North and South East Asia suffered double digit decreases in March and April. The bottom, however, was reached in May, a month in which many destinations saw their arrivals decreasing by over half. Particularly badly affected were Singapore, Hong Kong, Taiwan (pr. of China), Vietnam, Malaysia and Thailand. In June, July and August results generally were still negative but each month less pronounced. The countries that show the highest decreases by the end of this period (over 20 %) are Malaysia, Taiwan (pr of China), Singapore and Indonesia. China also suffered  seriously, but has a somewhat lower accumulated loss of 17% till July, due to strong positive results in the first three months of the year.

However, data for the last few months show that recovery is underway, as decrease rates are becoming less and less accentuated. Also, some destinations such as Macao (China), already managed to achieve positive results in July and August of +3% and +14%.

South Asia continued to post increases, particularly significant in Sri Lanka and in the Maldives with growth rates of 24% and 18% respectively, while India (+12%) and Nepal (+13%) also did well.

Africa and the Middle East

The limited data available for both regions shows, above all, the surprisingly strong and quick recovery of some of the destinations of the Middle East and North Africa from the Iraq conflict. In Africa, the most important destinations in the North, Tunisia and Morocco, demonstrate a clear positive trend. In particular Morocco impresses with a 7% increase over the first eight months, in spite of the May terrorist attack in Casablanca. Tunisia recovered steadily during the summer months from the decreases suffered between March and May, and ends the period just even. In the other African destinations, South Africa seems to slow down a bit from the strong trend of last year and the first months of this year.

Nevertheless, it still accumulates an increase of 5% till July. Furthermore, Kenya (+36%) and Angola (+33%) posted double-digit increases in the first half-year. In the Middle East, both Egypt and Lebanon still faced substantial losses in April and May, while again recording steady increases in the following months. For the year to date, they added already 7% and 4% respectively.

The WTO World Tourism Barometer

The WTO World Tourism Barometer is an activity of the Market Intelligence and Promotion Section of WTO with the aim of monitoring the short-term evolution of tourism in order to provide the tourism sector with adequate and timely information.

The WTO World Tourism Barometer is published three times a year (January, June and October). At the outset it contains three permanent elements: an overview of short-term tourism data from destination and generating countries and air transport; a retrospective and prospective evaluation of tourism performance by the WTO Panel of Tourism Experts and selected economic data relevant for tourism.

The third edition of the WTO World Tourism Barometer, with preliminary full year results for 2003, will be issued at the end of January 2004 in the framework of the Spanish tourism fair FITUR.

The WTO World Tourism Barometer is a service developed for the WTO Members (Member States, Associate Members and Affiliate Members), which automatically receive one copy as part of the WTO members service. For non-member subscriptions please contact: infoshop@world-tourism.org