The international travel industry is in an upbeat mood as it gathers for WTM London, but its host country – the UK – faces some stiff challenges with Brexit and the impact of terrorism clouding the outlook for 2018.
These are the key findings of the WTM 2017 Industry Report, released today. It finds that of the 1,622 travel delegates surveyed, 74% predicted industry growth, with only 1% expecting a decline. Italy (predicting 54% growth) and Greece (predicting 35% growth) were identified as the top countries to do business with at this year’s event.
WTM London’s spokesperson Paul Nelson said: “These survey findings echo the feedback we are getting from exhibitors, most of whom expect they will do more business at WTM London 2017 than WTM London 2016. We estimate that deals worth around £3 billion will be signed.”
The findings are reiterated by the World Tourism Organisation (UNWTO), which said business confidence was at its highest level in a decade following international tourist arrivals growth worldwide of 6% from January-April 2017. But transportation and accommodation prices are expected to increase on account of strong demand, with the 2018 Global Travel Forecast of the GBTA Foundation and Carlson Wagonlit Travel predicting a rise of 3.5% in airfares and 3.7% in hotel prices.
The report goes into detail about how the UK travel industry is expected to perform, with negotiations to secure Brexit by March 2019 moving slowly and casting a long shadow.
One thousand British consumers were asked for their views, with more than half expecting travel to become more expensive as the pound slumps against the euro and the US dollar. Other major concerns were the possible loss of free healthcare in the EU, increased congestion at passport control and the potential loss of free roaming in the EU for mobile phone users.
More than half of UK travel companies told WTM researchers that Brexit had already had a negative effect on their businesses, while nearly 40% expected it would become more difficult to recruit staff from EU countries.
In another survey, UKinbound members reported that more than 20% of their EU-national employees had already left the UK “because of the long-term uncertainty over their status”. Almost half of UKinbound respondents were having difficulties recruiting EU staff because of Brexit.
Nelson added: “Brexit is already having a profound impact on the travel industry – the fall in sterling since the 2016 referendum has been one very visible consequence, but the ramifications of the vote go much deeper. Our programme at this year’s event will help delegates understand the implications more clearly – for example, our World Travel Leaders and aviation sessions will discuss the impact of Brexit, and our Leaders’ Lunch will feature the European Parliament’s chief Brexit negotiator, Guy Verhofstadt.”
Not surprisingly, bearing in mind terrorist attacks in British and European cities in the past years, more UK consumers are concerned about the potential impact this will have on their holidays.
The industry report finds that 52% of British people who took a holiday this year are concerned about terrorism, with 14% of those saying they are extremely concerned – up from 38% and 9% respectively in last year’s survey.
The UK travel industry is also suffering the consequences, with 72% of industry respondents saying that terrorism had impacted their businesses, and 26% reporting a “significant” impact. Terrorism was by far their major concern, ahead of issues such as Brexit, the refugee crisis, natural disasters and health scares.
Brighter news is that 20% of British holidaymakers would consider visiting Tunisia in 2018, after the British Foreign and Commonwealth Office lifted its advice against all travel to the country. Thomas Cook and specialist tour operators will return next year for the first time since the June 2015 terror attack in Sousse.
In another finding sure to be hotly debated at WTM London this week, the report finds that UK industry bodies and the UK government need to clarify consumer protection following the recent collapse of Monarch Airlines.
The US also faces challenges, with 27% of British consumers saying they are less likely to visit while President Trump is in charge and 40% of the travel industry saying the US is “not a country to do business with under the current president”.
“There is now clear evidence that some people are being put off visiting the US, and some of travel’s top executives are concerned about the Trump effect on their businesses,” said Nelson.
The WTM Forecast Forum: 2017 Industry Report takes place Monday 6, 10.30-11.30am at the International Media Centre