U.S. recession could cut tourist numbers: U.N. body

By Ben Harding

MADRID (Reuters) - The world's tourism industry could shrink this year if the United States falls into a deep recession and drags other economies with it, the World Tourism Organisation said on Tuesday.

But Francesco Frangialli, Secretary General of the World Tourism Organisation (WTO), added he remained optimistic the number of tourists arriving in foreign countries would rise for the fifth consecutive year, albeit at a slower rate than last year.

"The best prediction we can give today is that we do not predict negative growth for 2008, except if the American economy falls into a deep recession followed by the rest of the world," Frangialli told a news conference at the U.N. body's Madrid headquarters.

Last October WTO experts were already warning that growth of tourist arrivals would slow to around 4 percent this year -- the long-term average -- from 6 percent in 2007 and 5.4 percent in 2006 on the back of economic uncertainties sparked by the U.S. subprime mortgage crisis.

Frangialli said it was important to remember that the United States made up only 10 percent of tourist receipts despite accounting for a quarter of world GDP.

"We are cautiously optimistic for 2008, though we don't think it will be as good a year as 2007," the Frenchman said.

Tourism receipts reached $733 billion in 2006, the WTO estimates, or about 1.5 percent of global GDP.

John Kester, the WTO's head of analysis, told Reuters it was too early to say whether the organization would cut its forecast of a 4 percent increase in arrivals for this year: "We don't really know how the (economic) situation will spill over into Asia. If things really turn sour, we will go to 2 or 3 percent".