Downturn Takes a Bite Out of Tourism Internationally
By LISA PHAM |
Published: August 17, 2009
CAPRI, ITALY — This Italian island, off southern Italy, is known as the playground for movie stars, soccer players and billionaires, and for normally attracting tourists from all over the world. But this year, its numbers are down. Restaurants are practically empty at lunchtime. Most luxury hotels are not full.
“After 23 years working in Capri, this is the first time that it’s been slow,” said Salvatore Vitiello, 42, a waiter at Al Piccolo Bar, in the Piazza Umberto, where only a handful of customers enjoyed a drink on a recent afternoon. Mr. Vitiello estimated a 30 percent drop in tourists this year when compared with 2008.
The global tourism industry is taking a nosedive despite the peak summer season in the Northern Hemisphere. Travelers are taking shorter vacations, if they go at all, and spending less. Hotel occupancy rates during the first half of the year are down in Europe, the United States, the Americas and the Asia-Pacific region compared with last year, according to data compiled by STR Global, a market forecaster.
A report published in June by the World Tourism Organization, a United Nations agency that studies and promotes tourism, predicted that the industry would decline by 4 percent to 6 percent over all during 2009. Those figures were revised downward because of the global recession and concerns about the influenza A (H1N1) virus.
David and Sharon Zad from Los Angeles acknowledged being more cautious about how they spent money because of the economic downturn. During a recent three-week vacation in Europe, they resisted the urge to splurge.
“Shopping doesn’t make sense here because of the exchange rate,” said Ms. Zad, who works in real estate development. Eight years ago, a dollar was worth €1.14. These days, it hovers around 71 euro cents.
But visitors to the United States are also cutting back. Despite a weak dollar providing better value for most travelers, the downturn has limited their disposable income. During May, the latest full month for which figures are available, international visitors spent 22 percent less on travel and tourism-related activities compared to the same period last year, according to the U.S. Department of Commerce. Tourists spent more money in the United States than anywhere else in 2008, when the industry was still booming.
May was the seventh consecutive month in which the U.S. spending figures were down compared to the year-earlier period, after more than 60 consecutive months of growth, according to a report by the Office of Travel and Tourism Industries, a government agency that promotes U.S. tourism interests. The number of international visitors was 12 percent below last year’s figures, the report said. “Reflective of the current global economic environment,” the agency wrote in a forecast summary, “international travel is forecasted to decline by 8 percent in 2009.”
Britain, another top international tourist destination, is also suffering. According to the Travel Trends report published in July by the Office for National Statistics, the number of foreign tourists visiting Britain in 2008 fell for the first time in seven years. While more French residents crossed the Channel to take advantage of the weak pound, the number of visitors from the United States decreased by 20 percent.
British residents opted for less expensive travel destinations closer to home, with the amount of overseas travelers dropping by 0.6 percent last year, according to the Travel Trends report. The trend is continuing in 2009 as their economy plunges further into recession and the value of the pound against other currencies continues to fall.
Even Asia, which last year was expected to experience a milder downturn, has not been able to escape the travel industry decline. The United Nations tourism report shows that tourism demand in Asia and the Pacific region fell about 6 percent in the first four months of 2009.
Cathay Pacific, a leading airline serving Asia, had 4.2 percent fewer passengers from January to June this year when compared with a year earlier, despite posting a profit for the first half of 2009.
But the report says that not all regions have experienced a downturn. Foreigners traveling to Africa grew by 5 percent during the first four months of 2009. The travel industries in Morocco and Tunisia have been helped by inexpensive package vacations from overseas tour operators.
Similarly, more economical accommodation options are benefiting from the global recession. Hostelworld.com, an online budget reservations provider, reported substantial hostel booking increases for places like Moldova, Colombia and Ukraine during the past year.
“Growth in these markets is driven in part by the economy and those seeking more affordable choices in accommodations,” a Hostelworld.com representative, Aisling White, said in a statement.
Businesses that are surviving the economic downturn are getting creative. During April and May this year, the Hotel La Palma in Capri organized free live music to entice customers, as well as a special offer of a two-course meal and glass of wine for €25, or about $35.
Travelers may be spending less over all, but they are still spending. Marcus Leon Pelham, the restaurant and bar manager at the Hotel La Palma, said it had received more bookings this year, especially from people who might have gone to a more expensive property in the past.