viewpoint 2010 autumn

8/8/2019 Viewpoint 2010 Autumn

http://slidepdf.com/reader/full/viewpoint-2010-autumn 1/8VIEWPOINT 1

Asia’s growth being ‘on fre’, increasing

investor confdence, and the gradual return o

business travel are all hot topics or Travel &

Tourism business leaders.

“This year’s Summit set the uture agenda, helpingdistill the issues, opportunities and barriers to growth

acing us. Not least the prospect o an additional two

billion people joining the middle-class by 2030 and

the consequences or our industry,” says Jean-Claude

Baumgarten, CEO & President o WTTC, which

organises the annual event. “These discussions will

inorm our dialogue with governments to adopt

policies to help Travel & Tourism thrive.”

In CNBC interviews at the Summit, JW ‘Bill’

Marriott Jr, Chairman & CEO o the eponymous

hotel group commented that the tourism growth

potential o Asia is ‘on fre’ at present, with China

particularly important. The country’s 50 million

outbound visitors are expected to double over the

next fve years, although or America to beneft

ully it must address its visa policies and procedures.

(See page 3)

Other comments reected the industry’s resilience

and its potential or leading nations back into black.

For Dara Khosrowshahi, President & CEO o

Expedia, there are signs that business travel is coming

back, although “recovery will take a number o years”

to reach pre-recession levels. Even more promising

is that investors are “coming o the sidelines and

wanting to get money out into the market,” says

Arthur de Haast, Global CEO o Jones Lang LaSalle

Hotels, ollowing a tenold drop in the volume o

European transactions between 2007 and 2009.

“There is much to be positive about,” concluded

Baumgarten, but we must keep the pressure on

governments to realise growth.”

Watch CNBC’s The Business of Tourism, hosted by

Louisa Bojesen, here

EVENTS LISTING

AUTUMN 2010

APEC Tourism

Ministerial Meeting22-23 September Nara, Japan

WTTC Executive

Committee Meeting4 & 5 October

New York, USA

Adventure Travel

World Summit4-7 October

Scotland, UK

Hotel Investment

Conference Asia Pacic13-15 October

Hong Kong

Asia Travel Leaders

Summit18-19 October

Singapore

Russia & CIS Hotel

Investment Conference25-27 October

Moscow, Russia

Global Eco Conference25-28 October

Queensland, Australia

World Travel Market8-11 November

London, UK

Credits

Editor: Elliott Frisby

Design: Creative Heads Ltd

© 2010 World Travel & TourismCouncil

WTTC is not responsible for the content

of third-party websites

The opportunity o an extra two billion people

joining the middle-class was highlighted at the

Global Travel & Tourism Summit by Goldman

Sachs. It is was underlined by Anthony Tyler,

Chairman o the International Air Transport

Association (IATA), who reminded his audienceo the correlation between the rise in auence,

and international and domestic travel patterns. He

spoke o “a marked acceleration in travel when

per capita GDP rises above US$20,000 a head.”

The Summit took place in Beijing as the country’s

government became the frst major economy to

ully uphold Travel & Tourism as a strategic pillar

o its national wealth.

Delegates and speakers were drawn rom theleaders o many o the world’s oremost Travel &

Tourism businesses.

Turn to pages 4 & 5 for more news from the Summit

KEEP THE PRESSURE ON

2 BILLION JOIN MIDDLE-CLASS

VIEWPOINT

Autumn 2010

http://www.cnbc.com/id/15840232/?video=1523364990&play=1


http://www.creative-heads.co.uk/

http://www.creative-heads.co.uk/





Last month marked two years to

go until the 30th Olympic and

Paralympic Games arrive in London. Just as Beijing used its Games “to put

the new China on the map”, the UK

– through VisitBritain – will make use

of its status as a leading destination to

benet Travel and Tourism businesses

throughout the nation.

WTTC Member, Christopher Rodrigues,

was interviewed by CNBC about the

potential o London and the rest o the

UK making use o its reputation as an

iconic travel destination. VisitBritain, theorganisation he chairs, recently orecast that

the number o jobs supported by tourism

between now and 2020 will rise rom 2.63

million to 2.89 million, as spending by

overseas visitors almost doubles. An above-

average annual growth o 3.5% per annum

over the coming decade is thanks in part to

the lure o the 2012 Olympics.

The report also warns that Government

intervention will be key to success because

a range o market ailures need to be tackled.These include co-ordinating marketing to

help small and medium sized businesses,

enabling rural frms to adopt innovative

technology, and supporting areas that rely

disproportionately on tourism or low

skilled and part time jobs.

WTTC has commended Prime Minster

David Cameron’s announcement o a

review o tourism strategies and the policies

that aect it. However it comes ater years o

neglect o the industry; an attitude that has

helped to restrict growth in the sector.

Jean-Claude Baumgarten points to anti-

airport expansion pledges, overreaction

to the volcanic eruption, the continuingchallenges o visa processes, and unair

taxation, which could threaten the UK’s

global standing in visitors’ eyes.

“It is good news that a British government

may fnally take action and avoid losing its

competitive advantage,” Baumgarten says.

“We look orward to contributing to the

Prime Minister’s strategy.”

See how South Africa, Abu Dhabi and Brazil rate the impact

of ‘mega-events’ in this CNBC vignette.

WTTC and its Members are exploring ways to more eectively

lobby the European Parliament or a single European sky. It

ollows losses o US$5 billion in a single week caused by

government reactions to the volcanic ash cloud. Other issues are

regulations surrounding passenger compensation and the cost o

increased airport security.

IATA Chairman Anthony Tyler has called or governments and

regulators to work together “to make travel easier, more convenient,

more cost eective, and simply more pleasurable and hassle ree.”

Straightening up air routes and operating more sophisticated air

trafc control systems could save uel costs and consumption, and

reduce CO2 emissions, he claimed.

WTTC is already making plans to meet with Antonio Tajani, the

EU’s Commissioner o Enterprise and Trade, responsible or Travel

& Tourism.

UK Prime Minister David Cameron made a number o overseas

visits at the start o the summer as part o his sel-proessed

‘messianic’ drive to secure overseas trade. He has made securing

oreign investment a policy priority and while in New York,

visited Wall Street to get fnance fgures to invest in Britain.

WTTC President & CEO Jean-Claude Baumgarten believes thePM must also look to the tourism industry i he wants a solution

or the UK’s return to economic prosperity. “Travel & Tourism

epitomises successul overseas trade with visitor exports making

up a signifcant part o the global economy.

“What’s more, businesses in this industry are continually investing

in oreign markets – just look at the hotels being built in London

today. Governments must come to the table in partnership with

the private sector and consult on sustainable policies that can help

the industry thrive.”

Some o the issues that need to be addressed include human

resources, sustainability, visa policies and processes, taxation andinrastructure. “With proper support and investment to nurture

growth,” Baumgarten continues, “our industry has the power

to rapidly create jobs, contribute to the economy and generate

wealth throughout the nation.”

FOCUS ON...THE UK & EUROPEUK GOVERNMENT MUST TAKE ACTION

TRAVEL & TOURISMMAKES TRADE SENSE

Watch Christopher Rodrigues’ CNBC interview.

EUROPE’S SINGLE SKY

We are already making plans to

meet with the Prime Minister...

...and get his government’s

support for growth

http://youtube.com/wttc#p/u/26/RVN1gl6YpA4









Demographic shits around the world are

presenting a number o opportunities and

challenges or governments and industries o all

kinds, not least Travel & Tourism. With a potential

two billion extra people joining the middle-

class, gaining a greater disposable income, and so

fnding international travel more aordable, the tourism industry

is already making moves to ensure it can welcome them. An equal

challenge was whether the industry could cope with increasingnumbers o domestic visitors in growing economies with huge

populations like China or India.

A number o speakers at the Global Travel & Tourism Summit in

Beijing this year questioned what awaited these millions o extra

visitors as their confdence and ability to travel overseas increased,

and as newer destinations relax their borders to welcome well-

seasoned travellers. Yet again, Travel & Tourism businesses are

taking the lead in some countries by identiying gaps in resources

and investing in local markets to fnd solutions.

One o the issues being wrestled with by Marriott Internationalis making sure to build the leadership and talent needed to keep

up with growth and run the business. “We‘ve got great Chinese

leaders but we’re throwing responsibility at them very, very

quickly... we need a lot o people,” said the company’s President

& COO Arne Sorenson at the Summit.

WTTC is taking the issue orward, exploring possible solutions

and how working with the public sector might help.

“As populations increase and more and more o them –

particularly in the BRIC nations – get ready to travel in their

own country and beyond, this is clearly a pressing issue or Travel& Tourism businesses,” says WTTC Chairman Georey Kent.

“As the body representing their interests around the world, we

will be examining ways in which the right policy environment

can resolve it.”

Another barrier to growth that WTTC hopes to be addressed

is the issue o visa policies and processes. During the Summit

Bill Marriott used the example o the United States: a dream

destination or Chinese citizens but one that had ewer Chinese

arrivals than the city o Paris, France. “We still need to improve

our visa and entry processes... to advocate or more consular

aairs ofces, quicker processing times, speedier entry and awarmer welcome when international travellers arrive,” he said.

Arthur de Haast Global CEO o Jones Lang LaSalle Hotels

also pointed to the difculties o in-person interviews, too ew

overseas consulates and the reciprocal approach governments take

that together can create restrictions on growth. He suggested

that electronic interviews could be used more requently – a

view echoed by James Hogan, CEO o Etihad Airways. He too

believes that given times o increased security, the solution lies in

wider use o technology so that those who want to visit can go

online and get a visa “in real-time.”

It was let to Jyotsna Suri, Chair o Bharat Hotels to have the fnal

word: “One o the take-outs rom the Summit, is that i we could

have slightly more conducive visa regulations.”

Although 2010 is being cautiously predicted as one o recovery, the

international economy continues to be spooked by uncertainty.

Many countries are looking at ways to maintain or restore their

fscal health ater the global fnancial crisis.

With another summer holiday season well underway and Travel

& Tourism looking orward to better prospects, the private sector is hoping that the burden o taxation does not all once again on

its shoulders. Indeed WTTC believes that in some cases, taxation

has already reached unsustainable proportions.

While some nations will view a rise in value-added tax as a quick

win, the industry knows it is something that inherently aects

the price o many o the services provided to tourists. Elsewhere,

airlines must meet increased costs o security measures at airports

or the blunt instrument o taxes on ying.

Both Etihad Airways’ James Hogan and Anthony Tyler o IATA

and Cathay Pacifc took the opportunity o the Global Travel

& Tourism Summit in May to highlight the fnancial pressures

placed on the aviation sector particularly. The ormer called or

an even playing feld and pointed to the UK’s air passenger duty

which doesn’t go back into sustainability programmes.

ADDRESS VISA BARRIERS

UNSUSTAINABLE TAXATION

TOURISM WILL RISE TOHR CHALLENGE



The 10th Summit – masterully MC’d by Uf Ibrahim

in her fnal Summit as COO or the organisation – had

a “double-edged theme” according to WTTC President

Jean-Claude Baumgarten.

“World’s Leading Industry is intended to remind us that

we still have a lot o work to do to raise awareness o

Travel & Tourism’s importance and achieve the kind

o recognition worldwide that President Lula gave

us last year in Brazil, and that China’s State Councilhas also recently given in announcing that tourism

will be a strategic pillar o the country’s economy,”

he said.

“We are counting on more heads o state to join their

ranks in the coming 12 months.”

“The second part o the theme is Reaching New Frontiers.As

one o the largest contributors to global GDP, we are right

to look beyond our economic impact and to try to realise

more loty, more worthy, ambitions – addressing the many

other challenges acing us and our industry, whether they

be social, cultural, environmental or climatic.

“But I am not going to add my voice to those who

ocus only on the difculties this industry has to ace,”

Baumgarten said. “I have been in this industry or the last

40 years, I have seen a lot o changes, and aced a lot o

challenges, but I have above all witnessed a lot o growth

and adaptability on the part o Travel & Tourism. And this is

what we are going to talk about over the next ew days.

“How are we going to continue to adapt to the changing

marketplace and unlock the ull potential o Travel &Tourism to help achieve our ambitions and thereby

also improve the livelihoods and well-being o local

communities the world over, especially in emerging

markets? How can this sector play the role it needs and

deserves to play in this 21st century?”

For attendees including Air China, the China National

Tourism Administration, Etihad Airways, Expedia,

Marriott International, the US Travel Association, Walt

Disney Parks & Resorts, and Whitbread among others,

it was a fnal opportunity to wish Uf well as she joins

the British Hospitality Association as its new CEO.

Watch the CNBC vignette ‘Driving economies

THE INDUSTRY TAKES STOCK

The Travel & Tourism industry is still going through

a difcult time and the economic outlook remains

uncertain. On this, the Summit ound strong consensus

among speakers, panellists and other

delegates.

“It is clear that we can only improve

i we work constructively together

to bring about positive change to the

way our industry works,” said Anthony

Tyler, Chie Executive o Cathay Pacifc

Airways. “There are many things that

governments and regulators working

together can do.”

Among the dierent issues cited, key concerns included

airport security measures – “Why on earth can’t

requirements be aligned in a way that not only serves

the vital interest o security but also the long-sueringtravelling public?” The airline industry has to oot the

bill or all airport security – to the tune o nearly US$6

billion a year post 9/11 – and “there’s no logical reason

why airlines should have to carry this burden when,

ater all, the protection o the public rom acts o crime,

violence and terrorism outside o the airport is the

responsibility o public authorities,” Tyler said.

Other major talking points, in terms o

barriers to tourism growth, were air trafc

control and airline routes, and taxation

such as air passenger duty in the UK

and similar schemes being implemented

in other countries. Regional or national

schemes are inevitably discriminatory,

counter-productive and competition

distorting, delegates agreed. And bitter

experience demonstrates that they usually have more

to do with revenue protection and generation or

governments than environment protection.

“Governments have always believed in the myth that

aviation is a cash cow that is there to be milked at anyopportunity,” said Tyler. “I only the myth were reality.

Over the last 60 years o civil aviation, airlines have

generated US$32 billion in profts and US$11 trillion

in revenue, a proft margin o just over 0.3%.”

REMOVING BARRIERS

HIGHLIGHTS FROM THE 10TH GLOBAL

TRAVEL & TOURISM SUMMIT

...we can

only improve

if we work

constructively

together…

http://www.youtube.com/wttc#p/u/27/KrZUPDOR5rM

http://www.youtube.com/wttc#p/u/27/KrZUPDOR5rM



NEW GOLD

Global tourism aces a challenging year

due to the downturn but the uture is

bright, especially or the BRIC economies

– Brazil, Russia, India and China – with a

growing middle class in emerging markets

eager or travel.

Anna Stupnytska, an economist or

Goldman Sachs told delegates “We’ll see

middle-income classes explode by some 90

million a year, which means there will be 2

billion more people with middle incomes

in the world by 2030. And most o them

will live in the so-called BRIC countries.

“Tourism will rise as income levels rise...

As people get rich, and move to the middle

class, they spend less money on necessities...

and the tourism sector explodes.”

Her words were echoed by WTTC

Member Jabu Mabuza, CEO o Tsogo Sun.

“Travel & Tourism can be an important

contributor to Arica’s economy, providing

jobs, alleviating poverty… Indeed, very

early on it was recognised that the minerals

we had were already ossils… So Travel &

Tourism has become our new gold.”

ENOUGH PLACES TO STAY? With this rapid growth in domestic and

inbound travel, the question becomes is

there enough capacity to accommodate

them all? “We’re betting big on China,” said

JW (Bill) Marriott, Chairman o Marriott

International. “We have 45 hotels here now

and will have 60 by the end o the year…

And that number will double in 12 years.”

His view was echoed by Hubert Joly,

Carlson’s President & CEO, “Asia plays a

critical role in our uture. It’s 30% o our

pipeline. For Radisson, it’s 40% o the

pipeline. We currently have 10 hotels open

in China, another 11 under contract.”

Meanwhile, InterContinental Hotels is

planning to build 200 hotels in China over

the next ew years, to quote CEO, Andrew

Cosslett. It aims to employ a urther 60,000

new sta over the next three years alone.

But even such ambitious plans will be

dwared by demand, according to Arthur de

Haast, Global CEO o the hotel investment

consultancy Jones Lang LaSalle Hotels.

Noting that there are currently almost 1.6

million rooms in China versus 4.5 million

in the USA, he said that i one approximated

the potential demand by extrapolating rom

the two countries’ populations, there would

need to be 15 million to 20 million rooms

in China’s uture inventory.”

For those who had yet to encounter it in

their businesses, hosting the Summit in

China brought home the reality o the

country’s economic and tourism potential.

“The Municipal Government has raised

Rmb10 million (US$1.4m) to encourage

the development o high-end tourism,”

Zhang Huiguang, Director o the BeijingTourism Administration told delegates.

His words were also reected in a number

o “awesome and numbing” statistics. Vice

President o the China Tourism Academy,

Dai Bin pointed out that “in the past 30

years average GDP worldwide has doubled

to US$7,119 while in China the increase

has been 21-old. By 2015, China will

have 244 commercial airports.” But more

than that “the number o civil aviation

air routes in China has increased nearlyourold since 1990. The number o aircrat

registered in China has reached over 1,600

compared with just 94 back in 1990,” added

Anthony Tyler, Chie Executive, Cathay

Pacifc Airways. “And this is going to rise

to 4,000 over the next decade. The number

o [airline] passengers in ten years time is

ofcially orecast to be 700 million, and 1.5

billion by 2030.”

The China National Tourism Adminstration

remains a orce to be reckoned with and, or

many, o incalculable value when operating

in the country. Giving his keynote speech

CNTA Chairman Shao Qiwei said: “Some

are saying the tourism industry is a ragile

industry. However, in China we ound that

although it has its ragile side, it has another

side. Ater any cr isis occurs recovery is most

rapid in tourism. It has a strong propensity

or sustainable development, and can

thereore make a big contribution to world

economic growth.

“Second, tourism

also generates a very

positive role in terms o

job creation – in China,

this means 11 million jobs directly and 5

million jobs indirectly.”

Although the largest proportion o travel

by the Chinese remains their 1.9 billion

domestic trips, inbound arrivals surpassed

50 million, and “we are already the biggest

source o overseas tourists in Asia,” Shao

Qiwei added. “It is against this background

that the Government has raised the goal

o developing the tourism industry as a

strategic pillar o the national economy.”

While recognising its enormous

potential, Barry Diller, Chairman

& CEO, InterActiveCorp oered a

health warning. “Businesses that ail

in China are those that come in with

preconceived ideas o how to do things.

Watch CNBC’s spotlight on China

MEASURING CHINA’S GROWTH





WTTC has published its Climate

Change Policy Brie. The brie presents

fve themed recommendations and ten

actions to guide governments in orming

policies to help the Travel & Tourism

industry meet its commitments to the

green agenda.

Destination stability is essential or successul

tourism, but WTTC is concerned that

climate change is having an impact on that

stability as well as on ood and water security.

It is clear that a threat to tourism comes in

orm o bad regulation rom governments.

While the links between Climate Change

and Travel & Tourism are known, the

industry remains under scrutiny. Conversely,

the eectiveness o carbon osettingschemes has been called into doubt by some.

James Hogan, CEO o Etihad Airways,

said at the 10th Global Travel & Tourism

Summit in Beijing: “the challenges or many

carriers as they move down this path o

sustainability is the carbon oset programme

which, i it isn’t a global ocus, is going

to place huge fnancial pressure on

carriers worldwide.”

The fve recommendations – seen as aprogressive way orward by WTTC – are

responsibility; sustainable growth or local

communities; education or customers

and stakeholders; greening supply chains;

and innovation or capital investment and

inrastructure.

The Climate Change Policy Brie is

released ater the disappointing UNFCCC

COP15 Event in Copenhagen in

December 2009. Supported by its Members,

WTTC has made a serious commitment

to reducing Travel & Tourism’s part incarbon emissions.

Watch the CNBC vignette on sustainable

tourism.

WTTC’s newly launched

Best Practice Gateway is

gaining commendation

rom around the world or

its wealth o sustainability

advice through case

studies rom leaders inTravel & Tourism. But

ar rom resting on its

laurels, WTTC wants to hear rom many

more organisations currently investing in

such initiatives.

Jean-Claude Baumgarten, President o

WTTC, says: “Travel & Tourism has

long led the way in helping to protect the

environments and communities on which

it depends. We know there are many

more out there achieving brilliant success

and we want to help them share their

experiences and advise others throughout

the industry.”

The Gateway illustrates the industry’s

leading role in sustainability. Destinations,

accommodation providers, tour operators,

and Tourism or Tomorrow award winners

and online travel intermediaries are all

represented, while the Air Transport Action

Group oers access to a comprehensivecollection rom the aviation sector.

Current case studies include the home o

the only British canal boat in North America,

a 1,900-property strong Green Hotel

Directory, an Earth Guest programme by

one o the biggest hospitality chains in the

world, and an initiative to reduce building

on China’s amous Mount Huangshan.

Baumgarten continues: “Case studies are

drawn rom across the private and public

sector, proving that only by working in

partnership can we guarantee the uture or

our industry and the planet.”

Once again, WTTC will be joining

destination representatives rom around

the world at the annual World Travel

Market, taking place in London rom 8 –

11 November. The organisation will make

use o the opportunity to ‘bang the drum’

or private-sector interests in the industry.

President & CEO Jean-Claude Baumgarten

will take private-sector priorities to one

o week’s most important events, the

Ministers’ Summit, which this year takes the

theme o ‘Governance and business models

or the uture’. He will speak alongside

UNWTO Secretary-General Taleb Riai

to an audience o tourism ministers and

aides rom around 150 countries.

The Minister’s Summit will be an ideal

platorm or WTTC to promote public-

private sector partnerships and their benefts

or Travel & Tourism worldwide.

As Sebastián Escarrer, Vice Chairman o

Sol Meliá has commented, the industry

needs “a united voice,” particularly now.

“I we act together through bodies like the

WTTC, we can inuence the policies o

dierent governments. Because too many

times they [governments] are either not

doing anything in crisis or what they do is

to kill the industry.”

CLIMATE

CHANGE

CHALLENGE

SHARE YOUR BEST PRACTICE

BANGING THE

DRUM AT WTM

http://www.youtube.com/wttc#p/u/28/h0dOO5xLeF8


http://www.wttc.org/eng/Best_Practice_Gateway/

http://www.wttc.org/eng/Best_Practice_Gateway/




http://slidepdf.com/reader/full/viewpoint-2010-autumn 7/8



WTTC’s autumn executive committee

meeting takes place in New York City

again this October. A number of sessions

will update Members on WTTC

activity, research and policy initiatives,

and give them an opportunity to

contribute to the organisation’s agenda.

Members will also enjoy a reception

hosted by USA Today.

A special session will be dedicated to

developing the programme of the 11th

Global Travel & Tourism Summit in

Las Vegas from 17 – 19 May 2011, while

another part of the two-day event will

involve a roundtable discussion on the

human resource challenges facing Travel

& Tourism – currently the subject of

one of WTTC’s key policy initiatives.

An open meeting on 5 October gives

media and industry representatives an

opportunity to contribute their own

viewpoints on the subject too.

The team at WTTC are always happy to

help with any questions you may have

about the power of Travel & Tourism.

Jean-Claude BaumgartenPresident & CEOc/o [email protected]

Nancy CockerellAdviser, Policy & [email protected]

Elliott Frisby Director, [email protected]

Jason Norman Director, Finance & Company Secretary

[email protected]

Alison Osborne Director, Council [email protected]

Tony Thompson Director, [email protected]

Eva Aimable Manager, Policy & [email protected]

Sarieu Caramba-Coker Ofce Manager [email protected]

Anja Eckervogt Communications [email protected]

Susann Kruegel Manager, Policy [email protected]

Pamela Priest Executive [email protected]

Paulina Tomczyk Membership Co-ordinator [email protected]

Yan Zheng China Marketing [email protected]

Write to us at:1-2 Queen Victoria Terrace

Sovereign Court

London

E1W 3HAUK

Telephone us on:+44 (0) 20 7481 8007

CONTACT US

INVITING VIEWS

WTTC’s President & CEO will

be speaking at the Asia-Pacic

Economic Cooperation (APEC)

Tourism Ministerial Meeting in Nara,

Japan this September. He will outlinecurrent Travel & Tourism trends and

what the organisation is planning as

it heads towards the next Global Travel

& Tourism Summit in Las Vegas.

The Tourism Ministerial Meeting

develops discussions at ministerial-level

on the policies for the promotions of

tourism exchanges within APEC. Since

its rst meeting in Seoul in July 2000,

various discussions on tourism have

been exchanged from the viewpointsof economics, culture, society, and

environment. It is an ideal opportunity

for WTTC to strengthen links with

governments and put forward some of

the priorities that the private-sector

needs to be addressed.

ADDRESSING APEC

viewpoint 2010 autumn

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