ABTA Travel Convention logoThe travel industry will recover from the recession faster than many other sectors according to economist Doug McWilliams.

Speaking at the Travel Convention in Malta this morning the chief executive and founder of the Centre for Economic and Business Research said the industry would benefit from a fundamental shift in the way people spend.

He explained: “If people expect just a year of hard times they will simply cut out luxury items or hold off on buying them.

“But with longer term expectations, people are starting to spend more carefully, on average spending 3% less than before the crisis as they research purchases more thoroughly.”

This shift in behaviour effectively liberates cash, which McWilliams believes may well be spent on holidays.

He did not express much hope for the fight against taxes such as Air Passenger Duty in the short term which he described as “set in tablets of stone” for the time being.

McWilliams said he believed the government would realise that with public sector cuts the private sector needs more freedom to drive the economy, and hopefully debilitating taxation would ease.

He also told delegates to expect steady oil prices at between $70 and $80 for the next three to four years while the Saudis have control of supply, believing that they will want to keep prices low enough to not drive people to other sources of energy for as long as possible.

He also predicted that the euro would become a two-tier currency at some point because a single currency cannot work if inflation is not stable across member countries.