Industry adopts new value system

Dubai: This summer the tourism industry is changing. At no other time in recent memory has the world economy been so volatile and forecasts so gloomy. At what should be a busy booking time ahead of the popular summer holiday period, tourism authorities throughout the world are reporting a sharp decline in the number of predicted visitors and even further drops in vacationing costs.

And it isn't a situation that will quickly correct itself. The downturn in the travel and tourism industry is following the worldwide economic decline and there is no short-term solution.

As part of its 2009 Economic Impact Research, the World Travel and Tourism Council (WTTC) warned industry leaders from all sectors of travel and tourism that times were getting tough.

WTTC's president and CEO Jean-Claude Baumgarten says the latest research has shown a bleak macro-economic forecast for 2009 which is expected to remain weak well into 2010 with only marginal growth.

However, Nasser Jamal Khan, Al Naboodah Travel and Tourism Agencies' general manager, says that while there has been a slight dip in corporate bookings over the first quarter, leisure travel has seen a small increase.

He believes that popular holiday destinations such as the UK and Europe will remain strong, particularly as their currencies have dropped against the dirham with South Africa, Singapore and Italy seeing an upturn in demand.

Khan concedes that there is the possibility that the 2009 season may not be as strong as last year but still believes that summer bookings will be substantial.

"In spite of the economic downturn, Al Naboodah Travel and Tourism is proceeding with its expansion plans with Ras Al Khaimah and Arabian Centre offices already included in our network and Abu Dhabi coming online in the next few weeks," he says.

Jonathan Galaviz of Globalalysis, a leading boutique travel and leisure sector strategy consultancy, says that there are good-value destinations throughout the world that holidaymakers may not have previously considered but which make financial sense in the current economic climate as well as offering a new and exciting change to summer holiday plans.

Top of Galaviz's list is Las Vegas, one of the world's best-known travel and leisure destinations. Stung by falling visitor volume, fewer than three million people visited the Southern Nevada city in January, a drop of 11.9 per cent from the same period in 2008.

According to the Las Vegas Convention and Visitors Authority, average daily room rates plunged 19.9 per cent from the previous year, the steepest decline since the 9/11 terrorist attacks and citywide occupancy fell 13 points to 71.9 per cent for the month. In some areas occupancy rates fell 16.6 points to below half-full for the time in recent memory.

Thailand is also a destination that has struggled to fill its hotel space. Protests at Bangkok's two main airports late last year, together with a downturn in the world economy, threatened to bring the country's tourism industry to its knees with empty beaches and dwindling tourist numbers.

But, according to Galaviz, Bangkok still represents good value for money with the industry there keen to attract visitors. Hotel websites are offering off-season rates during peak season and some luxury hotels are discounting more than others. Industry executives, however, are still concerned about the country's political climate but hope this will change with a new government in place.

"This value tourism destination has become even greater value as hotels and airlines reduced rates to induce travel and visitation due to lower levels of spending from Asia," Galaviz says.

"From dynamic food to a friendly culture, Bangkok is surely one of the best experiences for the leisure traveller. However, tourists must be cautious of the non-violent political risks that remain in Thailand"

Hotels in Bali are slashing room rates amid falling occupancies. Total foreign arrivals reached a record 1.97 million in 2008 but the Bali Tourism Authority believes this will drop 8.6 per cent to 1.8 million as the effects of the global economic downturn begin to take their toll.

Galaviz's other recommendations for holidays throughout the world may not be high on popularity stakes but Globalysis believes they represent good value for money particularly in light of currency fluctuations.

Moscow, while not a strong tourist destination, says Galaviz should be considered by both adventurous and financially astute holidaymakers. "The recent falls in Russia's currency, the Rubble, and the overall poor performance of the economy has led many hotels and airlines to reduce rates to Moscow. In addition, the summer is a great time to visit Moscow as the weather is much milder than the harsh winters," he says.

Seoul is a place not to be dismissed when it comes to selecting a holiday. Galaviz believes that the recent plunge in South Korea's currency, the Won, make Korea is a very attractive value destination this summer.

"While Seoul is not known as a premier tourism experience in Asia it certainly is worth a visit as many hotel rates in Korea are now 40 per cent down on what they were last year due to the poor economic and lower value of the Korean Won, " he says.

The author is a freelance writer based in Dubai.