Global Tourism Trends after September 11, 2001
Donka Sokolova - President of the Executive Council, Bulgarian Association of Travel Agencies (BATA)

I have the pleasure of participating in this forum, which is so important for all of us, on behalf of the Bulgarian Association of Travel Agencies. I would like to thank Mr. Bob Miller and Mr. Maxim Behar for offering us the opportunity to co-organise this major event.

I will take this opportunity to present BATA, Bulgaria's largest association in the tourism industry. Founded in 1992 as a voluntary non-profit association whose purpose is to assist, represent and protect the economic interests of travel agencies and tour operators, BATA currently has more than 250 members. BATA is a member of the Universal Federation of Travel Agents' Associations (UFTAA), the American ASTA, the Russian RATA, the Portuguese APAVT and the Japanese JATA. The Association co-ordinates the issuing of IATA-UFTAA ID cards for Bulgaria. It is co-founder of the Black Sea Cooperation in Tourism (BSTC), established by 12 Black Sea countries, and of the Council of Training in Tourism at the Kliment Ohridski University of Sofia. BATA members hold senior executive positions in the UFTAA, BSTC, the ASTA Chapter, the PATA Chapter and other organisations. BATA has been and is involved in international projects under the Phare Programme, Leonardo da Vinci and other programmes. It is a partner of the American FLAG Consortium, the Peace Corps, the British Know How Fund, etc. BATA has regional chapters in Bulgaria's larger cities - Sofia, Plovdiv, Varna, Bourgas, Veliko Turnovo, Gabrovo, Rousse - which are helping assert the Association's positions and national and international prestige. BATA members handle 85% of Bulgaria's inbound and 80% of outbound tourism.

BATA is one of the country's first non-governmental organisations and has passed a very difficult path of development. Yet in all those years we have never abandoned our principles of defending the interests of our members, and have been pro-active in boosting the development and quality of the Bulgarian tourist product.
We have invariably acted as a corrective in the sphere of tourism of all governments to date. We believe that we have acquired enough experience and resources, therefore we now want to partner the Government, helping avoid possible mistakes and improving the quality of the tourist product.

I am truly happy that the initiative to hold the First International Conference on Tourism in Bulgaria has been realised at such an important time, when we must respond to the WTO appeal and pool efforts to save the tourism industry from recession in the aftermath of the September 11 terrorist attacks. In fact, this is not our first international tourist forum. It has been preceded by other no less important forums devoted to the problems and development of sustainable tourism. After September 11, the world is no longer the same, and I would like to see this Conference as a symbol of the readiness of the tourism industry to fight for its survival by all possible means and, especially, through our governments, which should takes measures relieving and encouraging the development of tourism in these particularly hard times.

Let all of us at this forum say "no" to terrorism and "yes" to our efforts to restore confidence in tourism companies and to strengthen their faith that we will guarantee their security and safety.

At this critical time for the entire global tourism industry, when governments across the world are taking special measures to help their national tourist markets, we think that the Bulgarian Government should likewise join in this policy and remove all economic obstacles delaying the development of tourism and blocking the prospects of tourism - including resolution of the VAT problem. We are seriously concerned about the introduction of VAT on sales of tourist packages abroad as from January 1, 2002. The Government, the Ministry of Economy and Bulgaria's entire tourism industry are responsible for finding a better solution that will keep the Bulgarian tourist product competitive. The situation is also influenced by the position of the EU's current member states, which are not ready to equalise their tax rates. Against this background, Bulgaria is faced with the real danger of turning into an unproductive and non-competitive tourist market. In this connection, I would also like to remind you of the adverse effect of the introduction of VAT in the Republic of Ireland on the growth of tourism in that country. After Ireland abolished VAT, growth rates were restored very quickly.

Our hopes are raised by the fact that the tourism industry has responded instantly to the crisis following the September 11 terrorist attacks - dozens of measures have been taken around the globe designed to strengthen tourism companies and restore consumer confidence in travel. The adopted recovery strategies and assessment of the current situation in tourism were also timely - they were presented at a meeting of the newly created Crisis Committee of the World Tourism Organisation (WTO), held on the eve of the World Travel Market trade fair in London. Egyptian Tourism Minister Mamdouh El Beltagui, who chairs the Committee, declared that "the crisis is a global one, but it must be managed on a local basis. Some destinations are more affected than others, so specific actions need to be tailored to fit the different situations."

The WTO reports that travel reservations world-wide currently stand 12-15% below the levels of last year this time, as a result of the terrorist attacks, the war in Afghanistan and a global economy that was weakening even before September 11.
According to the WTO's new study, "Tourism after 11 September 2001: Analysis, Remedial Actions and Prospects," the hardest hit destinations are ones dependent on long-haul air travel, places that are heavily reliant on tourists from the United States and countries in the Muslim world. The immensity of the attacks, the fact that the United States was the target and the uncertainty inherent in terrorism have all combined to put the plans of thousands of travellers on hold.

Before September 11, world tourism was on track for an increase of 3-4% in 2001. Now WTO estimates that year-end results will show growth of just 1% in tourist arrivals.

We would like to believe the assurances of WTO Secretary-General Francesco Frangialli to the Committee that "the industry will begin to come back as the global economy improves in the second half of 2002. People need to travel for business and people nowadays consider holidays to be more of a necessity than a luxury." So tourism has been proving increasingly to be a very resilient industry.

Meanwhile, the crisis is proving to be a catalyst for the industry. Countries around the world have taken fiscal measures to strengthen tourism companies - they are working in closer co-operation with foreign tour operators, and they have initiated new marketing campaigns.

Tourism leaders are also taking advantage of the attention given to the crisis to emphasise how important the industry is to their national economies.
Here I would like to note several examples of measures undertaken at this critical time:

» the Mexican Government has eliminated sales taxes on conventions and has increased the promotion budget by 50%, outlining a series of other measures to stimulate the industry;

» the Argentinian Government is cutting taxes on tourism businesses and re-focusing its promotional campaigns towards domestic tourism;

» the Egyptian Government has earmarked US$ 30 million to subsidise charter flights into the country and ensure that tour operators do not reduce seat capacity;

» the US Administration has set aside US$ 20 million for a TV advertising campaign starring President George W. Bush. It will also formulate a legislative package that includes low-interest loans for businesses, tax credits for personal travel, and the formation of a government Tourism Policy Council. And so on and so forth.

The Bulgarian Government has declared that tourism is a priority industry but must, however, follow the example of governments across the world in stimulating this industry - yet it must hurry up and do so before it is too late.

BATA strongly supports the position of UFTAA, whose member we have been for years, and which has called on the entire industry to pool efforts to restore customer confidence in the value and experience of travel. Travel agents and all their partners around the world must help rebuild this confidence, because precisely travel agents are capable of re-instilling, through personal face-to-face communication, the desire to travel in a secure environment. We all believe that travel and tourism is an industry of peace, and that is why we must take our responsibility and act firmly to save the industry from catastrophic recession.

We are also joining in UFTAA's Call for Unity upon members and partners in all countries to take joint action, at national and international levels, to counteract the effects of the tragic event that has shocked the world, by doing the following

» Call an emergency meeting with key players in the travel industry to agree on a national action plan

» Call upon all members and non-members to join in common actions

» Request members to plan action lists to call upon customers in direct action and communicate "best practices" in actions for general knowledge and guidance

No government or private sector is capable of achieving a positive result if there is lack of co-ordination among tourist infrastructures. Solutions will be found only through the co-operation of all countries. More than ever, we must demonstrate our unity and leadership in restoring public confidence in our industry and returning to "business as usual" as soon as possible.

We are happy to note that the leading associations from around the world have come together to create a global Travel and Tourism Coalition for the purpose of extending common and joint support in the interests of the global economy, the tourism industry and the millions of people employed in it.

All of us - tour operators, travel agencies, airlines, airports, hotels, manufacturers, credit card companies, car rental companies, convention centres, visitors bureaus and all other tourism-related services - collectively form one of the world's largest industries, which is among the most active contributors to global economic development. More than any other industry, precisely tourism is a catalyst for economic diversity, job creation, entrepreneurship, cultural exchange and an interchange of cultures and people across the world.

The decisions made at the 8th World Travel Monitor Forum (held in Pisa, November 7 to 10, 2001), organised in co-operation with the European Travel Commission, are in the same vein. The main message to come out of the Forum: Although the terrorist attacks of September 11 on the US and the subsequent "war on terrorism" have had a severe impact on travel and tourism demand, let us recover the tourism industry very swiftly.

If we consider some of the post-September 11 global trends, we will note that:
In the US, following a 2% fall in 2001, outbound tourism is forecast to return to growth of around 1% in 2002.

In Europe, 2001 proved a flat year compared to an original forecast of a 4% increase. The European market, however, is also expected to record a 2% rise in 2002.

In Russia, after a few difficult years, outbound travel is also set to show healthy growth despite the impact of September 11.

Australian outbound travel posted a modest 1% growth in 2001 but forecasts a 4% increase in 2002.

The Gulf Cooperation Council markets reported a 5% growth in 2001 and expect to resume their former growth levels in 2002. The trends on the Chinese market are similar.

The 8th World Travel Monitor Forum in Pisa highlighted the fact that current trends are remarkably similar in key markets around the world. Among the current trends identified that are expected to continue through the first quarter of 2002, the most important are:

» Increased concern over safety and security
» A shift to domestic travel
» A shift to tried and tested foreign destinations closer to home
» A shift from air to ground transport
» A greater interest in VFR travel (visits to friends and/or relatives)
» Increased short-/city-break travel, but not to major city destinations
» Less interest in "fun and adventure" holidays
» An increased demand for authentic experiences including local culture and closeness to nature
» Destinations showing the sharpest drops in demand are the Middle East, some parts of South Asia and North America - and Europe for Gulf Cooperation Council travellers

According to the analyses of the European Commission, it is too early to draw final conclusions on the real damages to tourism after September 11, 2001. The recently issued Declaration of European Travel and Tourism Associations notes that even though the attack targeted the US, the consequences have affected the entire world tourism economy, and Europe is not immune to that. Almost 20 associations have signed this Declaration and pledge readiness to form a coalition taking measures to re-establish public confidence in tourism; they appeal for a return to "business as usual" so as to prevent this disaster from afflicting the European economy and culture. The coalition declares that the tourism industry is directly responsible for nearly EUR 400 billion in European activity, and supports approximately EUR 1,100 billion of spending in the wider economy. Around 1.2 million jobs would be lost for each 10 per cent decrease in demand. The coalition insists that the European Commission and all governments work together in partnership to ensure that measures to strengthen security are effective, harmonised and universally recognised as a foundation for the restoration of consumer confidence in the branch. In this sense, the newly founded Travel and Tourism Recovery Committee, which emerged from the other newly created structure, the Crisis Committee of the World Tourism Organisation, is in line with the approved action guidelines. The Committee includes tourism ministers from 21 of the countries most affected by crisis, 15 leaders of private sector tourism companies or associations, and representatives of the European Commission.

The WTO has reported an alarming 15% to 20% fall in tourist travel bookings world-wide from the same period last year.

In this context, the Global Coalition recently formed by the World Travel and Tourism Council, identifies three priorities for governments and the tourism industry:

» Promoting the implementation of any security measures
» Encouraging people to travel
» Supporting a policy of sustainable tourism and travel development.

The appeal of World Travel and Tourism Council President Jean-Claude Baumgarten is in the same vein: "It is vital that all governments and private sectors play an important role in the recovery of the industry. Because only partnership among all governments can ensure measures increasing the security, safety and confidence of travellers."

The reaction of the European Travel and Tourism Action Group (ETAG) has been adequate and timely. ETAG believes that the faster actions are co-ordinated at the European and global levels, the greater the guarantees that we will not allow economic destabilisation of the tourism sector. Here are part of the EC analyses on the impact of the September 11 terrorist attacks on tourism:

» Overall decline in the volume of tourism movement in the most affected countries - the US, Japan, the Middle East.

» Fear of travel.

» Danger of adverse effects on the European economy, especially considering that European tourism is not seasonal but year-round, covering the EU's internal and external markets.

» Serious fall in charter flights to and from Europe, as well as in Europe.

» Reduced capacity and higher fares will contribute to a reduction in air travel in the medium term.

» The choice of transport in the short term is in favour of rail travel against air travel, which indicates that airline companies must win their markets back through active promotion.

» The choice of destinations in Europe is less affected by the crisis in regard to EU internal tourism volumes, and in some cases destinations are already benefiting from reduced airfares offered by some airlines.

» Destinations that have redirected their promotion campaigns to markets less affected by the crisis and have created new tourist products, will recover reasonably quickly. In some cases, creative pricing will generate new markets.

» An increasing tendency for travellers to save rather than spend on travel.

The fact that more than 40 European and international tourism-related associations have submitted their views on how to cope with the post-September 11 crisis to the European Commission shows that professionals in the branch are interested in and committed to active co-operation. This crisis has demonstrated yet again that tourism is an integrated and independent sector that incorporates not only air transport, which has been worst affected, but also all tourism-related sectors in Europe and the world.

The analyses of inbound tourism in the EU show that citizens of third countries account for not more than 13%. As regards overseas markets for European destinations, the effects have been particularly serious for those destinations hosting "incentive groups" and international conferences and exhibitions.
The EC analyses indicate that tour operators and travel agencies have been seriously affected by the crisis. Around 80% of plane tickets from Europe are sold via travel agencies, comprising 40% of their turnover. Immediately after September 11, 2001, there were many cancellations, a considerable part of which included a refund. There is a drastic decline in travel bookings for forthcoming international events. The top profit-making segments - first class and business class travel, long-haul flights, etc. - have also seen a tangible drop that has affected many tour operators too. Many small and medium-sized companies, which did not have financial reserves, are going bankrupt, others are dropping out of the market, and still others are downsizing personnel. Revenues from car rentals for short and private business trips are also expected to decrease by one-third.

In those hard times for the tourism industry, it is of crucial importance that the governments of the respective countries cut fees and taxes to encourage travel at the global level.

I very much hope that after the end of this forum we will be enriched with new ideas for co-operation in new spheres of joint work, and that we will have won new friends and business partners, that we will have realised the power of joint efforts to overcome the crisis in our industry, that we will be of mutual benefit to one another, and that we will help and support each other.