The Chicken and the Egg: Tourism and Air Transport Linkages Chris Lyle Representative of the World Tourism Organization to ICAO ICAO/McGill Worldwide Conference Air Transport: What Route to Sustainability?
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The Chicken and the Egg: Tourism and Air Transport
Linkages
The Chicken and the Egg: Tourism and Air Transport
Linkages
Chris Lyle
Representative of the World Tourism Organization to ICAO
ICAO/McGill Worldwide ConferenceAir Transport: What Route to Sustainability?
Montréal, 26 September 2010
International tourism and air passenger transport: Locked at the
hip
International tourism and air passenger transport: Locked at the
hipInternational air passengers are predominantly
tourists (business and leisure travellers)Over half of international tourist arrivals are by air
(increasing yearly, with much higher proportions for long-haul destinations)
International tourism and air passenger transport traffic and revenues tend to move in lockstep, with tourism being more resilient in times of uncertainty when tourists stay closer to home
Some current trends in tourism impacting on air transport
Some current trends in tourism impacting on air transport
Travel to destinations closer to home (“staycations”) and mode transfer away from aviation at short-haul
Decline in average length of stay (“breakneck breaks”)“Hypermobility”Later bookingSegments such as VFR, repeat visitors, special
interest and independent travelers more resilient
Some current trends in air transport impacting on tourism
Some current trends in air transport impacting on tourism
“Front end” traffic and yield – cyclical or slowing (increased use of videoconferencing, etc)?
Legacy carrier focus on consolidation and primary routes, with potential loss of service on “thin” routes
Strengthening market share and generation of new tourism streams by LCCs in short- and medium-term, but lesser advantage at long-haul and particular susceptibility to low margins, returning high fuel prices and withdrawal of “subsidies” (eg low airport charges)
Current central challenge common to tourism and air
transport
Current central challenge common to tourism and air
transport
Economic instability
International tourist arrivals, 1995-2009*
533566
591608
632
682 682701 690
760801
846
900919
880mn
400
500
600
700
800
900
1000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
mill
ion
2009: An exceptionally challenging year
International Tourist Arrivals, monthly evolution
(% change)
Source: World Tourism Organization (UNWTO) ©
-15
-10
-5
0
5
10
15
2008 2009 2010
Return to growth at end of 2009
UNWTO Panel of Tourism Experts
Better
Equal
Worse
Source: World Tourism Organization (UNWTO) ©
25
50
75
100
125
150
175
T1 T2'03
T3 T1 T2'04
T3 T1 T2'05
T3 T1 T2'06
T3 T1 T2'07
T3 T1 T2'08
T3 T1 T2'09
T3 T1 T2'10
T3
Prospects
Evaluation
2010: Forecast maintained
3.8
7.8
0.0
2.8
-1.5
10.1
5.3 5.66.4
3.5
2.1
-6
-4
-2
0
2
4
6
8
10
12
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Chan
ge (
%)
*Preliminary results
Forecast 2010: Between 3 and 4 %
Evolving driversEvolving drivers
Discretionary income and Demographics Motivations and Activities Cybernetics (age of the ePurse) Competition and Consolidation
International Tourism Expenditure (US$ billion)
Germany
United States
United Kingdom
China
France
ItalyJapanCanadaRussian FederationNetherlands
Source: World Tourism Organization (UNWTO) ©
0
10
20
30
40
50
60
70
80
90
100
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Everybody chasing the Chinese tourist…
UNWTO/European Travel Commission report on
‘Demographic Change and Tourism’ just released
Sustainability challenges for tourism and air transport
Sustainability challenges for tourism and air transport
Fuel prices and economic cycle Security and Facilitation Climate change Economic liberalization
Economic liberalizationEconomic liberalization
Tourism sector well advanced and functional Air transport stalled and isolated:
Bilaterals and blocsAir carrier ownership and controlInstitutional self-interest
Same gameDifferent rules
Progressive liberalizationProgressive liberalization
Bilateral “Open Skies” agreements (mostly in small markets), but “traditional” bilateralism still prevails between regions
Regional liberalization agreements including “Open Aviation Areas” (with “cabotage” and regional air carrier ownership, some more effective than others)
EU-US “Open Skies” agreement (stalled on air carrier ownership and control)
Liberalization snapshot Liberalization snapshot
Pace has slowed, with detriment to tourism and more general economic and social development Economic environment has produced:
For the nervous - retrenchment to focus on 3/4 freedom traffic and protection of “national”
carriersFor the bold – use of aviation as a successful
stimulus to economic recovery
A plurilateral approach?
Waiver of national ownership and control provisions in bilaterals
Agreement amongst two or more parties automatically extended to another party upon adherence to the agreement
Air carrier ownership and controlAir carrier ownership and control
Well-crafted liberalization would:
Open doors to investment
Reduce the need for indirect means of obtaining
market access (alliances/code-sharing, etc)
Improve safety and security regulation
Limit uncertainty regarding liability , and…..
Produce substantial economic benefits for air transport, tourism and the economy at large
Ways forwardWays forward
US draft discussion document on a “Multilateral Convention on Foreign Investment in Airlines”
IATA’s “Agenda for Freedom”ICAO’s Air Navigation Services Conferences –
from bilateral to plurilateral?GATS Annex on Air Transport Services
20202020
1.6 billion international tourists, spending $5 billion per day
“Level of penetration of the ‘real’ potential population in tourism in 2020 can be seen to be 7 per cent –
truly an industry still in its infancy.”UNWTO: Vision 2020
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