A leading economist has warned the travel industry faces a sharper slowdown than the overall economy in the next year.
Professor Douglas McWilliams, chief executive of the Centre for Economic and Business Research, told travelweekly.co.uk: “Travel faces an uncomfortable mix of a slowing economy and rising fuel costs – and fuel is critical.
“If growth slips by 1% of gross domestic product, travel generally slips by 1.2%. UK growth will probably be down 1.5% next year and there will be an impact.”
McWilliams predicted the oil price would remain high for at least two years – it is currently close to $100 a barrel – and in the long term he warned it could rise to $150-$200.
He predicted: “It is going to be quite a tough time – probably tougher on margins than on volume.”
The collapse in parts of the banking sector that has led to the squeeze on credit will take at least a year to unravel, McWilliams added.