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Financial crisis will not hit travel spending, say tourism leaders

Tourism leaders have joined the retail trade in dismissing fears that financial turmoil and increases in interest rates could hit travel spending.


US Treasury secretary Hank Paulson warned this week that the financial market crisis could become the most serious since the 1980s, amid growing concerns about a US recession.


A succession of interest rate rises in the UK is expected to dampen consumer spending as millions of home-owners see the end of fixed-rate mortgages.


However, World Travel and Tourism Council president Jean-Claude Baumgartern insisted: “The economy is strong enough to absorb the credit crunch. We don’t foresee any major impact on tourism.”


Peter Buckell, managing director of Global Travel Lounge in Norwich, said holidaymakers would rather miss out on a new TV than an annual holiday.


He said: “We are getting lots of families booking for 2008, saying they will not forgo their main holiday.” However, he believes: “Some clients will probably do away with a weekend break.”


Sandy Murray, owner of Sandy Travel in Normanton, said: “People are booking last-minute breaks for September and cruises for next year. We wouldn’t be getting bookings for next August if people were worried about their finances.”


Jimmy Martin, vice-president ofd Scottish agents’ association the SPAA, added: “People will readjust their budget but still take their summer holiday. Perhaps some will downgrade accommodation.”


The WTTC forecasts continued strong growth for UK tourism, inbound and outbound, in the next decade, although it predicts a small decline in the growth rate of business travel.


It foresees average growth in leisure travel of 4.3% a year and in corporate travel of about 3% to 2017. This compares with a 5% increase in business travel in 2006 and an expected 4% rate this year.

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