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The Chicken and the Egg: Tourism and Air Transport Linkages Chris Lyle Representative of the World Tourism Organization to ICAO ICAO/McGill Worldwide Conference.

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Presentation on theme: "The Chicken and the Egg: Tourism and Air Transport Linkages Chris Lyle Representative of the World Tourism Organization to ICAO ICAO/McGill Worldwide Conference."— Presentation transcript:

1 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? Montréal, 26 September 2010

2 International tourism and air passenger transport: Locked at the hip  International 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

3 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 booking  Segments such as VFR, repeat visitors, special interest and independent travelers more resilient

4 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)

5 Current central challenge common to tourism and air transport Economic instability

6 2009: An exceptionally challenging year

7 International Tourist Arrivals, monthly evolution (% change) Source: World Tourism Organization (UNWTO) © -15 -10 -5 0 5 10 15 200820092010 Return to growth at end of 2009

8

9 2010: Forecast maintained *Preliminary results Forecast 2010: Between 3 and 4 %

10 Evolving drivers  Discretionary income and Demographics  Motivations and Activities  Cybernetics (age of the ePurse)  Competition and Consolidation

11 Everybody chasing the Chinese tourist … UNWTO/European Travel Commission report on ‘Demographic Change and Tourism’ just released

12 Sustainability challenges for tourism and air transport  Fuel prices and economic cycle  Security and Facilitation  Climate change  Economic liberalization

13 Economic liberalization  Tourism sector well advanced and functional  Air transport stalled and isolated:  Bilaterals and blocs  Air carrier ownership and control  Institutional self-interest Same game Different rules

14 Progressive 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)

15 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” carriers  For the bold – use of aviation as a successful stimulus to economic recovery

16 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

17 Air 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

18 Ways 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

19 2020  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

20 Further information: www.unwto.org clyle@airtransporteconomics.ca


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