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

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.

A tourist holds her arms up to feel the wind coming up from the Grand Canyon on the Skywalk at Grand Canyon West on the Hualapai Indian Reservation in Arizona, March 20, 2007. REUTERS/Jeff Topping

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”.


WTO figures released on Tuesday showed 52 million more tourist trips were taken last year, taking the total to 898 million -- just over half of them to European destinations.

Tourist arrivals are expected to double from 2005 levels by 2020, Frangialli said.

Despite security problems in some countries, the Middle East was the fastest growing region (13.4 percent) but the most significant expansion was in the Asia-Pacific area which now accounts for a fifth of all arrivals after growing 10.2 percent.

Kester said countries that grew fastest last year -- which included Japan, Malaysia, Vietnam, Turkey, Egypt, Saudi Arabia and Morocco -- would continue to be the winners this year.

France was the world’s most popular tourist destination last year, followed by Spain, although in terms of tourist receipts, the United States took top spot with Spain again second.

Reporting by Ben Harding, editing by Stephen Nisbet