World travel and tourism will grow at a slower rate than forecast this year and next as a consequence of the crisis in the euro zone and slowing global economy.
The World Travel and Tourism Council (WTTC) downgraded its previous forecasts for the sector by about one third, predicting growth of 3.2% in the value of travel this year and 3.3% next year.
The WTTC had previously forecast growth of 4.5% for this year and 5.1% for 2012.
Announcing the revision on Tuesday at World Travel Market, WTTC president and chief executive David Scowsill conceded the forecasts would need to be downgraded further if the crisis in the eurozone continues.
Scowsill said: “Tourism tends to follow the economic cycle and GDP growth is losing momentum. Growth is lower than expected because of prevailing economic conditions, the market uncertainty and events in Japan and North Africa.”
He said the WTTC was “very conscious of what is going on in the eurozone. We may have to take another look at the forecasts.” However, he described growth of 3.2% this year as “laudable” in the circumstances.
David Goodyear, senior economist at Oxford Economics which produced the forecasts, said: “The central forecast assumes agreement on the Greek debt, but things are far from clear. There are downside risks and a great level of uncertainty.”
Goodyear said the forecasts assumed there would be no recession in the eurozone despite the head of the European Central Bank predicting “a mild recession”.
Scowsill described the outlook for the UK as “pretty positive, save for short-term issues”. The WTTC forecast annual growth of 2% a year in travel and tourism in the UK and Germany over the next decade – half its forecast for the global rate of growth over this period.