Tourism chiefs say financial problems will not damage industry

14 September 2007 by
Tourism chiefs say financial problems will not damage industry

Industry leaders have dismissed fears that financial turmoil and increases in interest rates could hit tourism spending.

US Treasury Secretary Hank Paulson warned this week that the financial market crisis could become the most serious since the 1980s, amid growing concerns about a recession in the USA.

A succession of interest rate rises in the UK is expected to dampen consumer spending as millions of home-owners see the end of fixed-rate mortgages.

However, World Travel and Tourism Council (WTTC) president Jean-Claude Baumgarten insisted: "The economy is strong enough to absorb the credit crunch. We don't foresee any major impact on tourism."

Jimmy Martin, vice-president of Scottish agents' association the SPAA, added: "People will readjust their budget but still take their summer holiday. Perhaps some will downgrade accommodation."

The WTTC forecasts continued strong growth for UK tourism, inbound and outbound, in the next decade, although it predicts a small decline in the growth rate of business travel.

It foresees average growth in leisure travel of 4.3% a year and in corporate travel of about 3% to 2017. This compares with a 5% increase in business travel in 2006 and an expected 4% rate this year.

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By Daniel Thomas

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