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International trends from Pangaea Network


Angela Merkel's New Year's Speech
In her traditional New Year's speech, Federal Chancellor Angela Merkel, encouraged the Germans to start the new year with confidence: „Germans have coped with somewhat more difficult challenges, and we will remember this in the new year." With regard to the international crisis, Merkel stressed the importance of the social market economy and its rules. These should be respected worldwide, she explained. She criticized the financial excesses of some bankers and managers and announced infrastructural measures and investments in the educational sector for the New Year.

Second Stimulus Package to Reflate Economy
Prior to the debate about a second investment package, the German Christian Democratic Union (CDU) and the German Socialist Party (SPD) have stated their ideas more precisely. Both intend to invest another 40 to 50 billion Euros to cope with the economic crisis. However, both parties set different focuses. While the CDU would like to stimulate consumption by heavy tax reductions, the SPD is in favor of cutting down on the social contributions, introducing new family benefits as well as a car wreck bonus.

Ifo Business Climate Index Continues to Decrease in December
The mood in the German economy reached a historical low in December 2008. The Ifo Business Climate Index decreased from 85.8 points in the previous month to 82.6 points. This is, according to the Munich Institute for Economic Research (Ifo), the lowest level ever since the German reunion. But not only those companies participating in the Ifo survey have bleak prospects for the future. The Federal Government, too, expects for the next year the worst economic slump in the post-war history. Internal analyses from the Economic Ministry anticipate a reduction in the economic output by three percent or more in 2009.

Economic Crisis Has Impact on Job Market
The number of unemployed people increased about 114,000 to 3.102 million in December 2008, causing a rise in the unemployment rate of 0.3 percent to 7.4 percent. Head of the Federal Employment Office, Frank-Jürgen Weise, drew from these figures that the economic crisis now has arrived on the job market, too.
Inflation rate down to two-year low
Gas, diesel and oil prices have slumped down in December to the lowest inflation rate since more than two years. According to the Federal Office of Statistics, consumer prices only increased by 1.1 percent compared to the previous month.

Mood in travel agencies declines
The Distribution Climate Index for December 2008 shows an unprecedented decline. Up to now, however, optimists prevail. Nearly half of the informants believe that revenues and demands will remain on the same level or even increase within the next six months. For December 2008 70 percent of the interviewees evaluate the travel sales as "good" or "satisfactory".

Travel Industry Fears Price War
In view of the current economic developments there is disillusion in the travel industry. The winter season had started off with a strong two-digit growth. Around Christmas, too, many Tour Operators achieved an increase in sales of more than ten percent. However, these skiing trips or holidays in the Caribbean had been booked already in the last spring or summer - before the financial crisis. According to Klaus Laepple, President of the German Travel Association (DRV), the travel industry has no high hopes any more. There is rather fear that a price war will break out in view of higher catalogue prices and smaller holiday budgets.

More Overnight Stays in October 2008
According to the Federal Statistical Office (Destatis) the number of overnight stays in Germany increased by 4 percent in October 2008 compared to the same month last year. Altogether, there were 34.3 million overnight stays, with 29.4 million local guests and approximately 4.9 million visitors from foreign countries.
Study: Researching Online - Booking at Travel Agencies
The study "ROPO - Research online/Purchase offline" delivers interesting findings with regard to travel booking behaviour. The central outcome of the study: More than one fourth of the tourism revenues in Germany are researched online and booked at a travel agency - with an increasing tendency. In particular the traditional tourism products such as the two-week all-inclusive package sun and sea holiday at a four star hotel are researched on the web first and then booked offline. Thus, online research takes on a "stirrup function" for travel agency bookings. Personal contacts and the employees' competence are the decisive factors here.

Sparkasse Tourism Barometer Germany
With close to 340 million overnight stays per year, Germany remains the second most favourite travel destination in Europe after Spain. However, growth rates were below average only in an international comparison: Whereas the number of travellers worldwide increased by over 6 percent to 898 million thus reaching a new record high, Germany's increase of about 4 percent lags behind the worldwide level. This is the result of the Sparkasse Tourism Barometer Germany 2008 by the German Savings Banks and Clearinghouse Association (Deutscher Sparkassen- und Giroverband). It was presented for the first time ever this year and is available for downloading at

Number of Flight Passengers Decreasing
According to the Federal Statistics Office (Destatis) the number of passengers who took off from German airports in the third quarter of 2008 (27.1 million) was 0.8 percent below the result of the same period in the previous year. In particular the European destinations with the highest volumes such as Greece (minus 6.2 percent), France (minus 5.9 percent) and Italy (minus 5.3 percent) suffered losses.

Tourism Trends
Coming Destinations until 2018
The travel magazine Urlaub Perfekt asked 1.141 travel agencies which destinations hold the biggest potential until 2018 and will therefore play a much more important role than they do today. The clear winner is the Gulf region with the Emirates and Oman, followed by China and Eastern Europe. The Cape Verde Islands unexpectedly came in fourth.

Differing Forecasts for the Tourism Industry
While the German travel industry is cautiously confident with regard to the coming year, the private bank Sal. Oppenheim which recently underwrote the capital increase of Thomas Cook's parent company, Arcandor, assesses the situation as critical. Klaus Laepple, President of the German Travel Association (DRV) said at the VDR annual meeting in Budapest: "We are expecting stable demand for organized holidays in the next year as well." The winter season 2008/09 currently shows a Tour Operator sales growth rate of more than 2 percent. According to its head economist Norbert Braems the private bank Sal. Oppenheim on the other hand expects a downswing in the tourism sector.

AIGO, Milan, Italy

The 2008 political elections have been won by the centre-right conservative coalition led by Silvio Berlusconi, now elected Prime Minister of the Italian Government. The opposition is represented by the center-left coalition and guided by former Rome mayor Walter Veltroni. He took the leadership role of Romano Prodi who left his political activities after the failure of the previous centre-left government (May 2006 - April 2008). The Italian President is Giorgio Napolitano, elected on May 2006.

According to ISAE (Istituto di Studi e Analisi Economica) statistics, Banca d'Italia Observatory and OECD Economic Outlook after a three-year period of low growth rate, a recession is on the way, which is likely to extend through much of 2009, as in all OECD countries. Recovering confidence towards the end of 2009 should allow output to accelerate significantly during 2010. The GDP is expected to be negative in 2008 (-0.4 percent) and 2009 (-1 percent) and recover in 2010 (+0.8 percent). As a first measure to face the situation, the government is debating a 5 billion Euro plan, expected to be in force within January 2009, for an immediate support to families and companies, which are suffering from the credit-crunch. Meanwhile, to prevent the negative impact on the labour market, the Ministry of Welfare is working on a comprehensive project aimed at protecting employment.  After a substantial reduction in the budget deficit in 2007, the fiscal stance turned somewhat expansionary in 2008. The government's three-year budget plan for 2009-2011, among other measures, foresees cuts in public employment to contribute to improved efficiency as well as fiscal savings. Inflation should decline significantly. The main contribution to lower inflation comes from the fall in energy prices but relevant to the decrease are also the forecasts of weak demand and labour market deterioration. Private consumption should decline by 0.2 percent in the first part of 2009 and expected to stagnate for the rest of the year.

Tourism Industry

Market Overview
Two of the main issues affecting the Italian travel industry in 2008: the crazy growth of oil prices in the first semester of 2008 and the impact of the economic slowdown on the middle class families, whose effects were amplified by the subprime mortgage crisis involving the Italian market, although to a limited extent than other countries. According to a survey conducted by Assotravel (Associazione Nazionale Agenzie di Viaggi e Turismo), despite the uncertainties of the market, the tourism sector has suffered less than other sectors the contraction in spending. The major Tour Operators have announced that, after a feeble start in early spring, the year 2008 ended with figures in line with the previous year. Even Italians have shortened long holidays' to an average stay of 10 days, also on domestic destinations, and the budget to 900 Euro. Long weekends and short breaks have become a well established trend. Seven million tourists were expected to travel during the holidays at the end of the year, with a total investment of approximately 3.7 billion Euros in pre-packed tours. The attention to saving emerges from the choice of destinations: noticed by a greater propensity to remain in Italy than in the past. The vacation on the mountains is in strong recovery thanks to the exceptional weather conditions that have marked the beginning of the season. Fully booked ski resorts in the Alps, with 3 percent growth in presence compared to 2007. The upward trend is expected to continue for the first months of 2009 despite the increase in prices at around 4 percent. Also growing is spa tourism, due to the increasing need of personal wellbeing and as an appealing solution for short breaks.

As for outbound travel, in addition to the traditional European capitals that offer solutions for every budget, the most popular destinations have been the beaches of the Indian Ocean and the Caribbean followed, to a lesser extent, from Kenya, Thailand, Australia, Brazil and Argentina while the USA are paying the empowering of the Dollar against Euro.

According to the Amadeus Observatory, 2008 was marked by the consolidation of advanced booking, but at the end of the year the phenomenon of last minute returned. Last minute is considered to be more convenient in this period of budget constraint and for people who postponed their decision to travel.

The cruise segment continues its positive trend. In 2007 about 640.000 Italians chose a cruise (+24 percent) and a double digit result is expected for 2008, in spite of the general constraint in the leisure travel segment. Cruises currently represent 1 percent share of the Italian holiday market and Italy is ranging third among the European countries for volume after the UK and Germany.

According to Enac (Italian Civil Aviation Authority) the low-cost carriers offer represents 25 percent share of the total Italian air traffic. About 40 carriers connect Italy with 20 countries. The leading position is held by Ryanair, followed by Easy Jet, based at Milan-Malpensa airport that, in spite of the general slowdown in sales, is growing on domestic connections, in addition to the consolidated European routes.

High-end travels seem not to suffer from crisis. Reservations for the most exclusive resorts have begun to reach the agency since last September. Among the most popular destinations in the luxury segment is Dubai, which has registered an important growth during 2008. The Emirates announced 36 percent increase in 2008 volume of sales and, with Italy being one of its priority markets, a further investment for 2009 is planned to double the daily flights from Milan-Malpensa.
Forecasts for 2009 are uncertain and fickle. An increase of niche segments such as luxury and the suffering of the mass market are expected, which will lead to reductions in expenditure, including those intended to travel. Due to a significant cut in the family budgets and reduced access to credit, more than 25 percent of Italians think they cannot afford to travel in 2009. 53.7 percent, instead, feel crucial a period of vacancy and would not spent money for trips, reduce the budget or further shortening the duration.

Nevertheless, the year 2009 will remain a difficult year, so it is important to review the business model and lay the groundwork for 2010, when economic recovery is expected. According to the statements of the key players, the travel industry is engaging to face the challenge by reviewing the pricing, lower fixed costs, seeking new sources of profitability and looking at new products on medium-short haul to meet the emerging market needs and satisfy the demand of cost effective proposals.

The 2009 investments from Tour Operators and airlines operating charter rotations are mainly addressed to well-established destinations and point-to-point connections, maximizing as much as possible capacity and frequencies.

The Alitalia issue has come to an end. The agreement between the board of Alitalia (newco, ex-CAI) formed by a group of Italian entrepreneurs and Air France-KLM has been signed on January 13th, 2009. It foresees the underwriting of 25 percent shares from the French-Dutch group against an investment of 322 million Euros and, subject to the antitrust approval, the access into the SkyTeam alliance. The Alitalia hub remains Rome-Fiumicino until the issue between the two Milanese airports Malpensa and Linate (city airport) will be solved. A number of airlines, interested in the North-Italian market, are now claiming for international and intercontinental connections from Milan-Malpensa.

Sources: Assotravel-Confindustria (Association of Italian Travel Agencies), Censis,(Study and Research Institut), IPK, ILSole24 Ore (financial newspaper)

bgb communications, London, UK

There is no let up in the bad news facing the UK economy, which is now technically in recession. The recent cut in interest rates brings the rate down to an unprecedented low. However, many banks and building societies are not passing the benefits onto their customers and it is severely hitting those, like pensioners, who rely on their savings as income.

The Government is talking about a second bail-out for the banks and there is considerable coverage of the fact that the first £37 million bail-out plus the VAT cut did not have the desired effect in acting as a fiscal stimulus. It is generally agreed that securing credit is the greatest problem facing the economy and the Government is currently announcing new measures to address this issue and increase bank lending to individuals and businesses.
Poor Christmas trading results have been announced by the retailers who launched unprecedented January sales in a bid to get rid of stock and improve their cashflow. They now face a bleak first quarter.

The continued closure of big High Street names such as Woolworths and Zavvi, plus the daily coverage of job cuts by companies like Marks and Spencer is completely undermining consumer confidence. Many of the manufacturers are moving their work-force to part-time in a bid to save money and jobs whilst continuing production. A number of surveys have shown that saving money and/or paying off a mortgage has become the major priority for many people.

The Housing market continues to be at a virtual stand-still with prices still dropping and some experts predicting a further drop of 15 percent this year. Whilst low interest rates have benefited those on tracker-mortgages, many people are now in negative equity on properties bought at the peak in late 2007/early 2008.
The positive news is the organisations flourishing in this type of economic environment. This includes the budget supermarkets, low-price fashion stores, and domestic tourism, particularly the holiday parks that offer a budget, all-weather family option

The "credit crunch" and subsequent recession is undoubtedly the most important, and most widely commented on, issue affecting the tourism business.
The last quarter of 2008 and early 2009 show a dramatic falls in sales, revenue and occupancies across the travel business. Bookings between Christmas and New Year showed down by 25 percent year-on-year but early January has seen the market respond to heavily discounted packages and flights. In a stark demonstration of the trend towards last minute bookings, recent statistics from one operator showed that 73 percent of bookings made in the first week of January were for travel in January.

New research shows, unsurprisingly, that almost a fifth of people will be looking for cheaper holidays in 2009. However, the survey by predicts that the average number of holidays planned will increase from 1.5 in 2008 to 1.8 in 2009. UK travellers are being heavily influenced by exchange rates. Countries within the Eurozone are seeing a drop in UK travellers as the pound has reached near parity with the Euro. The Pound/US Dollar exchange rate has also resulted in destinations or products linked to the dollar seeing a drop in British business.  Pundits are citing countries such as South Africa, Thailand and European destinations outside the Eurozone, such as Turkey, as the places to holiday this year. Ski and European short-breaks are suffering as people axe their "extra" holidays but all research shows they are still fiercely protecting their main summer or winter holiday. They are taking fewer risks, reverting to tried, and tested "best in category" recommendations. At the top end of the market, destinations and companies are drawing in bookings through very significant added value and discounts.

Domestic travel is seeing an upturn, particularly at the budget end of the market. Other sectors seeing positive trends are self-catering and villas - where clients can, to a certain extent, control their expenditure - and all-inclusive holidays, again insulating clients against additional expensive holiday costs. Cruises also seem to be bucking the trend, but at heavily discounted rates.

As a result of the high number of airlines and operators going into administration, financial protection has become the number one priority for consumers. A number of companies are using this as their marketing focus and industry associations are running campaigns reinforcing the importance of booking with a company that offers financial guarantees if a company goes bust.

Interestingly, the decline of sales through high street retailers appears to be slowing as agents maintained a steady 58 percent of passenger volumes in the first half of 2008. This still leaves online and call-centres with a phenomenal 42 percent of the market, with consumers increasingly using user-generated content for research purposes and continuing to become ever more confident about booking online. The internet is now almost exclusively sited as the first point of reference for researching a holiday (followed by holiday brochures and word-of-mouth) with people either going back to the internet or to a specialist for booking.
Marketing reflects this trend with the usual January burst of activity noticeably shifting from expensive traditional media, particularly TV, to online. Experts who have faced these tough trading conditions previously advise that with a shrinking market, it is essential to maintain a strong presence in order to steal market share and be better placed than competitors when the economy turns.

Tourism Trends
Responsible Tourism
Whilst the "credit crunch" is undoubtedly the most important, and most widely commented on, issue affecting the tourism business, responsible tourism remains high on the agenda of many travellers. A move away from ostentatious and opulent spending, which is deemed inappropriate in this market, is fuelling the demand for holidays where travellers can make a positive impact and feel they have done something worthwhile.

Research carried out by the Guardian Observer media group shows that UK consumer spending on ethical goods increased from £13.9 billion in 2000, to £29.3 billion in 2005 and it expects this figure to increase. Spending on environmental tourism grew from £1.7 billion to £1.8 billion between 2004 and 2005 according to the report. Four in ten people surveyed said they would spend more on environmentally friendly products.

A recent Mintel report entitled 'Consumers Attitude to Travel' showed 31 percent of respondents in the UK ‘agreed or strongly agreed' with the attitudinal statement "I feel guilty about the environmental damage of travelling". In a research report by TNS entitled 'Environmental issues when choosing holidays' results showed that Britain boasts the highest percentage of travellers likely to choose an airline with a reputation for fuel-efficient planes and that 18 percent would choose a Tour Operator that would subscribe to a carbon offsetting scheme.

The same report by TNS showed that 23 percent said environmental impact was important in destination choice and they would change their plans to reduce impact. In addition some people are saying they would like to take a holiday involving conservation-related activities. Companies in the travel business that offer carbon off-setting programmes, a voluntary or compulsory contribution to a charity and websites such as which has responsible travel at the heart of its business are all seeing the financial benefits as travellers increasingly prioritise responsible travel.

the blueroom project, Madrid, Spain

Market adaptation to the present scheme
Spain is ranked 8th out of all economies in the world and has remained one of the fastest growing of the EU's larger economies in 2006-2007, reaching the number of 11.3 million trips to foreign destinations in 2007.

The Tour Operator sector had undergone a favourable evolution (Tourism aggregated Business Volume reached 46.850 million Euros (+1.1 percent) in 2008, but for 2009 a decrease around 5-10 percent is forecasted). The growth of economy, consumers trust in the future and labour stability have generated a progressive increase of sales in previous years, but nowadays the developments of an economic crisis, are causing a more cautious consumers attitude. The Travel Agency sector has increased by 1.2 percent from January to September 2008, but 88.1 percent of all major Travel agencies' groups suffered a slight decrease (-10 percent) in sales during the last quarter of the year.

The Spanish industry has reached a record number of more than 11.000 Travel agencies in the country. The present crisis is creating a specialization and concentration process and those not adapting to the new market circumstances and demands will have to close (forecast of 5-6 percent of agencies closings). This situation is considered by some experts somehow positive in order to adapt the offer to the real demand of the market.

Despite the crisis, the number of trips in 2008 is above the figures of 2007 with an increase of 4.8 percent in outbound travels and a remarkable 9.8 percent in domestic trips. Industry experts highlight the success of the sky and mountain season in 2009 and forecast the increase of low cost products as domestic and city breaks.

Furthermore, Spain, as all markets during crisis periods, offers opportunities for those willing to adapt to the new reality:
· The interior market still represents almost 90 percent of all trips and in times of crisis, the number two destination in the world offers a wide range of low cost opportunities for consumers.
· Nevertheless, the Spanish outbound travel market is a young market and is growing year after year with a huge potential for further improvement in the line of other European mature markets.
· Regarding long haul travelling, the high-end and premium segments have a potential due to the economic growth period of recent years - in Spain there are 160.000 new rich/wealthy families. This present period can be considered as a moment of indecision and deceleration in terms of bookings, but some specialised companies confirm that expenditure has increased (+20 percent) to 3.500 Euro in 2008 in the lower range of luxury travel.
· The city break and short break segment is moving, specially with the low cost airlines - especially those carriers that have overcome the fuel price crisis are obtaining excellent results in comparison to the regular airlines on the market.

But above all, what consumers are looking for in this period of an international financial crisis is value for money - in business travel, in short breaks, in long haul travelling - therefore the sellers are adapting their offer to this demand with different strategies in order to benefit from the opportunities derived from the present times circumstances. A deeper insight into the matter of a changing reality follows in the next chapter.
Sources: Tour Spain - Hosteltur - Agenttravel - EFE

Tourism Trends: An Expert Opinion by Rafael Alberto Pérez

Tourism in times of crisis: A new game has started; learn the rules as you play - (Heterodox) Heptalogue for future winners

There is no doubt that crisis is the most common word nowadays, but do we use it properly? I do not think so. Crisis always implies bad press and we always associate it with bad meanings. However, this approach is erroneous. Crisis means problems but also opportunities. As a matter of fact, for the Chinese wisdom: "crises are disguised problems". Doctors use this word for describing the moment in which the illness has entered a phase that could conclude a sudden change. This could be negative but also positive: the immediate release of fever for example. In this sense, Crisis, in opposition to Lisis, implies a slow and long fever release.

When we talk about crisis in these times we think about the credit crunch and the international financial crisis, but the social crises always imply values. In addition, they are social crises because we live connected with others (for the good and the bad). In the social life, you enter a crisis period when a specific value system begins to be questioned while there is still a lack of a substitute system of values. Suddenly, we are facing an important mutation and we do not know what to do, how to behave and how we can connect and link with others. That is the moment when we get blocked.

However, crises do not allow paralysis and cannot be handled by complainers, but for those that can assimilate to them, interpret them and take advantage from them. With this objective, we have selected seven principles that can be useful to you:

1. Do not waste your time looking for causes: act on the interconnections
Systemic thinking experts like Maturana and Luhmann teach us that instead of wasting our time looking for the causes of a problem, we will do better by adapting on the interconnections of the system, that start to fail. It is in the borders and in the interconnections where problems begin and where leaders can generate changes.
2. Do not fight against the crisis: learn from it. If the name of the game has changed, play now with the new rules
Crises are always emergent as all mutations are. If you do not want to be trapped in them, you must learn the new rules. The sooner the better.
3. While you learn the new rules: manage well your reserves
Not only rules are important but also the playing cards. Those that have been able to accumulate an image-capital (reputation / brand awareness) will be able to sail safe in the storm. The question is: What are your reserves and how many do you have? To which extend, at the moment the crisis began, your destination, your hotel, your brand, your wine were products of desire? Desire is the name of the game (as it was well pointed out by Ernest Dichter). If this is the case, now is the time for you to manage that desire and play with it (we will see later how). If, on the other hand you have spent your capital and resources in only tactic offers and not in image-capital, your cards are stacked against you.
4. New games, new rules and new playing cards require new players
New rules are always heterodox rules. Do not look for them in the Harvard books. Your main task will consist in forgetting about your reference books and masters. The new books will have to be written by yourself (once you have overcome the crisis).
5. Heresy nº 1. The clients, consumers, travellers, etc. do not exist.
Life is not a matter of protocols between rational actors. What really exists are "humans" and therefore, relational beings that sometimes consume, sometimes travel and occasionally or repeatedly become your clients. Being a holidaymaker is a part-time activity.
For this reason, we suggest that you change your target groups and the sociodemographic descriptions of the market niches for one human being: one and not many (that really represents the prototype from the group). A profile can be done with his habits and reasons of acting, but above all his emotions, his interests, his hobbies and his social networks.
6. Heresy nº 2. Dare to touch them: be touch oriented
What those humans really want are satisfactions, desires, fantasies, etc. to be fulfilled. Your products and services are only (if perhaps) the material substrate of these desires and fantasies because at the end of all that, the world of fantasies is touchable: a woman, a man, a place or a beach. As Macluhan (1964) wisely used to say that "TV is any extension [...] of touch". If that is the case, success is a matter of epidermis. A matter of proxemia. Reduce the distances, bridge the gap. Those who invented hugs and hands shaking knew it well. Lady Di used to touch the sick (aids or leper patients) and that is why she succeeded above the role of an untouchable Queen. Learn how to touch, that is a human's weakest point. Do not be afraid of the word happiness because that - whatever they may say - is what everybody wants.
7. Heresy nº 3. Be like a spider: build your net
Try to think not in the selling situation and action but in the relational network of those human beings (usually called clients). Walk in their shoes and see how our intervention in their relational world can help them to live better. Learn to build a strong net, make them feel comfortable and better connected, but do not capture them. The idea is to build sense and meanings together not just by transmitting information or sales arguments. That does not work anymore, in crisis periods nobody wants to buy, potential buyers expect to be seduced, fulfilled and touched. Success is a matter of significance.
These seven principles can be summarized as follows:
Sooner or later all crises pass by. Act as this crisis had already vanished and you had already learned the lesson. Find the opportunities and get the most out of your image-capital resources and reserves, write down your strategy and choose the best consultant or agency for your company - not always the biggest and the most famous is the best for your needs. The important matter is that the one you choose is the best in the world for you. It should touch you.

By Rafael Alberto Pérez. Responsible for the Strategic Consulting Area - The Blueroom Project (TBP), Madrid, Spain. Author of the book "Communications Strategy" (Ariel 2001), Professor at the Complutense University in Madrid; President of FISEC (Iberoamerican Forum for Communications Strategies); guest lecturer in more than 90 international universities and member of the editorial council of
Indigo Consulting, Paris, France

Economy with Tourism Related Impact
The current situation in France is better known as the "crisis of the purchasing power". The prices of food, rents, oil and gas have increased by 3.7 percent over the last year - and the wages have remained the same: the French middle class has no money left for leisure and travel. From 2002 to 2007, the purchasing power had gone up but should loose 1.3 percent by the end of 2008. This has an immediate effect on tourism as the French cannot afford to travel as far and as long as they used to, these changes have boosted new travel trends.

The main French Tour Operators, such as Jet Tours and Kuoni, have noticed that the crisis has not really affected luxury travel. They have all issued new editions of their luxury collections for 2009 - Secrets de Jet Tours and Emotions de Kuoni - as the 2008 brochures generated excellent results. For example, Emotions brought 8.8 million Euros to Kuoni this year.

The French parliament has recently changed the law on retirement, allowing people over 65 to go on working for another 5 years. Senior citizens are high-quality travellers, they have time and money - this amendment could have a double-edged effect: senior workers might have less time to travel or on the contrary, they will be able to afford trips that are more expensive.

Tourism Trends
In the actual economic situation, the French have changed their travelling habits. Because they have less purchasing power, they now chose to go on shorter trips, more often in order to spread out the expenses over the year. Nowadays, the destination-choice is more and more motivated by the budget: travellers will choose a theme (seaside, mountain, sport, etc.) and the best value in that category.

Concerning this new way of travelling, Europe has become their first choice because of lower flight prices. The French have become great users of the web when organising their holidays. Online, they have immediate and easy access to a wide selection of hotels and flights and to the total cost of the trip. They can easily check the given information and visit personal holiday websites to confirm their choice. 4.6 million French internet users have web pages on which they talk about their trips: with pictures, comments, advices, tips, etc. they have become a real tool for the future traveller organising his trip. French travellers also have the habit of booking through a Tour Operator or travel agent if the package offers an added value such as a ticket for the theatre or the opera, entrance for an exhibition, gastronomic meal, etc. In 2007, 30.6 million French people over the age of 15 went on holiday, short or long haul. Forty nine percent of these travellers booked their trip online.

Tourism Industry
The tourism figures for the summer 2008 in France are stable compared to the year before. It seems that the world economic situation has not affected national tourism yet. From July to September, tourism activities have increased from 0.2 percent to 0.8 percent.
The number of guests staying in campsites has risen by 1.3 percent, whereas the number of hotel guests was stable in July and August 2008 but lower than in September 2007, this is a perfect indicator of the lower holiday budget. The results of the autumn school holidays were good, because people have made reservations before the crash. For the winter of 2008/2009, the French ski resorts have received slightly more booking than last year but these figures can vary with the weather.

Business travel is not suffering much for the global situation yet, but the important companies are tightening their budgets, for example by booking hotels in a lower category and by preferring low-cost carriers instead of business class flights. France has defined the new generation of travellers as being from the emerging countries: they are indeed new destinations, but they are definitely new tourists. Countries such as Brazil, Russia, India, China, Dubai and Mexico represent a real target for France as a travel destination. With nearly 82 millions tourists visiting France in 2007, the French Ministry of Industry and Finance has decided to set up a new program to help develop national tourism and make it an essential part on the country's economy. The three main targets are:
· Attract more visitors from the emerging economies such as India, Brazil or China to all parts of France offering a better service and accommodation.
· Enhance and modernise the offer for tourists
· Communicate on France as a travel destination.

Spring O'Brien, New York, USA

State of the Economy and Travel
U.S. consumers aren't spending, too worried about their jobs, their homes, their children's college tuition and their depleted retirement accounts. They're not traveling, either. The downturn in overall transatlantic travel, which began in November, continued through December, with an average decline of 4.0 percent compared to December 2007. U.S. travel to Europe was down 11.8 percent in October, according to the latest figures from the Dept. of Commerce. While the current decline in U.S. travel to Europe began in March, this was the first double-digit decline since April 2003, the height of the Iraq invasion. Projections for the first four months of 2009 are for continued monthly declines of more than 10 percent.

The U.S. economy has further to fall in the steepest downturn since the Great Depression, as 2008 ended with more jobs lost than in any previous yearsince 1945 - 2.6 million. Unemployment jumped from 6.8 percent to 7.2 percent, the highest since 1982. Americans looking for work now total 11.1 million. Retail sales and housing sales continue to decline, and banks are still holding back on loans for everything from cars to homes to new business ventures. Big banks like Citigroup and Bank of America report continued losses on home mortgages and derivatives and are seeking billions more in federal help.
The nation is looking toward President Obama's evolving plan for $775 billion-plus worth of public-works projects and tax breaks to create as many as 4.1 million jobs over two years. Assuming the economy continues to contract into the spring, this will be the longest recession, at 17 months, since the 1930s Depression. Few economists are predicting any upturn before the 3rd Q. And, based on the 2001 recession, unemployment could remain high long after growth resumes.

Latest Trends in European Travel, Tailored for American Travelers by SPRING, O'BRIEN

Local Immersion and Village Tourism
Nothing seems quainter than tour buses full of tourists gaping through windows while a tour guide or even - shudder - an audio guide recites a canned script. Today's travelers long to break through barriers to directly experience authentic cultural and social interaction. Thankfully, Europe's got buckets of experiences that allow for spontaneity, close encounters and unexpected moments that last forever in memory.

More rustic than local immersion, village tourism takes the plunge into local life in once-abandoned villages now restored expressly for travelers. Sometimes entire villages are transformed into inns, or sometimes just a few houses in a still-populated village are made over. Activities range from 18-hole golf to rusticating according to the old ways. One of their great virtues of these experiences is their affordability, especially for families and friends.

Conscientious Consumption
Conspicuous consumption is out; conscientious consumption is in. Despite their diminished purchasing power, consumers are willing to trade up for goods and services from environmentally responsible suppliers. No problem for Europe, which knows how to husband scarce resources. The rail network alone gets more people to more places with significantly lower carbon emissions than cars and airlines.

Destination Weddings: Not Just for the Tropics

Tropical weddings are so 20th century. Consider Europe instead. A Scottish castle is more romantic than just another beach. Or try a charming medieval town in the Czech Republic. If you must have a beach, Croatia, Cyprus, Greece, Italy and Turkey offer more interesting après beach diversions. All-inclusive wedding packages make them surprisingly affordable for small wedding parties-or for limiting your guest list without offending anyone.

Cheap Chic Hotels
In today's fiscally challenged environment, Europe rises to the occasion with original choices that leaven the lack of dough. When the times get tough, the chic find style on a budget. Under extreme duress, even an abandoned nuclear shelter becomes something of a statement. And if you must go first class, you can even do that for less.

ETC Transatlantic Conference: Navigating the Changing Travel Environment
Organized by Spring, O'Brien, the 28th European Travel Commission's TransAtlantic Conference was held on January 20, Inauguration Day, with a roster of distinguished thought leaders from the U.S. and Europe. Organized to help navigate the travel environment in 2009 and beyond, the conference was co-sponsored by The New York Times and held at the Renzo Piano-designed TimesCenter in New York City.

The current economic recession, the end of the Bush administration and the beginning of the historic Obama presidency herald big shifts in consumer spending and travel patterns. Travel marketers are concerned about the outlook for 2009, and the ETC Conference let them hear from a handpicked lineup of incisive speakers with timely views on charting the new terrain:
· Liz Alderman, Wall Street Editor, The New York Times, on "Barack Obama & the Challenges of the New Economy"
· Robert Frank, Senior Writer, Wall Street Journal, on "The Future of Wealth & Luxury Travel"
· Chris Sanderson, Cofounder, Future Lab, on "Consumer Trends in Travel: What's Next?"
· Gail Grimmett, Senior Vice President, Delta Airlines, on "Transatlantic Travel in 2009"
· Geoffrey Lipman, Assistant Secretary General, UNWTO, World Tourism Organization, on "Tourism in the New Green Economy"
· Arthur Frommer, Arthur Frommer's Travel Guides, on "Travel to Europe: the First 60 Years"

While US traffic to Europe was down seven percent for 2008, some speakers at the conference said that travel is still doing well, especially in the high end of the market, echoing consumer surveys indicating that the public still intends to travel but will look hard for good value and deals.
Chris Sanderson said that the industry should watch for the emergence of Travel 2.0, in which travelers will expect more customization or "one-to-one travel." Another emerging trend is the blend of business and leisure travel. The widespread use of the Internet and mobile devices mean that people are staying connected with their businesses and friends during their travels. Mobile devices will also change the face of travel as they become the key tool for both travel providers and travel consumers.

Arthur Frommer, author of "Europe on $5 a Day" and founder of the Frommer travel guides, cautioned travel marketers to remember that the largest segment of the market for travel to Europe uses economy lodging and restaurants. "Free spending travel is a very slim slice" of the market, said Frommer, who received the ETC's Lifetime Achievement Award for his contributions to popularizing travel to Europe.

Travel is increasingly becoming about the things that money cannot buy - experiences and emotions. Travelers may buy less, but when they do, they want a genuine experience, not flash and bling. The growing interest in arts and culture plays into this demand for experience and authenticity. And as consumers seek out unique forms of leisure - ones that may be less lavish but are more memorable - they are looking to tailor-made travel experiences.

Aware of environmental and economic challenges, discerning travelers are driving the rise of eco-travel. Ecotourism has been growing at rates between 20 percent and 34 percent per year, and is expected to make up 25 percent of the world's travel market by 2012, according to research by the International Ecotourism Society.
Geoffrey Lipman of the UNWTO made the point that certain ecologically correct movements are already in place in the tourism industry: green building, cap and trade, renewable bio-fuels, carbon footprints. "Tourism is going to be the ‘green' leader," said Lipman, "but we have to go beyond the 'changing the towels in the room policies' and firmly commit to such things as solar panels."





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