Issues Estimate of London Bombing Impact
|LONDON, UK – 8 July 2005 – Following yesterday’s bombings in London
the World Travel & Tourism Council Crisis Committee was convened to
discuss the events and the potential repercussion on Travel & Tourism
in the UK and elsewhere. The Committee commended the highly efficient
reaction of the rescue services and underscored the seriousness with which
the UK authorities had prepared for such an event. The Committee
unanimously agreed that early indications showed that the impact on the
UK’s Travel & Tourism industry would be limited. Travel & Tourism
companies have recovered their stock value within 24 hours of the attacks,
reflecting the confidence in the industry.
The Committee concluded that:-
Jean-Claude Baumgarten, WTTC President, said “It is expected that the impact of the London bombing, much like that realized by the Madrid and Bali bombings will continue into 2006 but will have completely dissipated by 2007. Of course this assumes that UK authorities undertake at least similarly strong measures of reassurance and encouragement to regain and rebuild visitor confidence and that no further events take place in the meantime.”
Please note that the WTTC Crisis Event Forecasting Model and the estimates it produces are limited by the historical database and simulation of previous events used in the analysis (see below) and the assumptions used to assess the current situation (see above). There is no guarantee or assurance that the estimates will materialize as suggested. It is for this reason that WTTC strongly recommends that these estimates be considered as one piece of information and reference, among many, that are used to guide government policy and business decisions during the reaction, recovery and rebuilding period.
Travel & Tourism is one of the world’s largest and fastest growing industries. According to WTTC’s latest Tourism Satellite Accounting Research, in 2005 Travel & Tourism will account for 10.6 per cent of global GDP and over 221 million jobs worldwide.
Effective communications by governments, the private sector and the media all play an important role in ensuring that, at times of crisis, the huge contribution Travel & Tourism makes to jobs and economies is not put at risk unnecessarily.
WTTC believes that one way to establish common ground is to produce authoritative economic research that provides all stakeholders with reliable information. To this end, WTTC has extended its proprietary Tourism Accounting Research to examine a series of historical events that can be used to help forecast the impact of a new crisis/event and assist government and industry leaders to develop informed strategies to assess needs and speed of recovery.
The historical assessment is based on an in-depth analysis of natural and human-provoked events including: the Gulf War (1991), Croatia Peace (1996), Luxor Attack (1997), Hurricane George (1998), 9/11 USA (2001), 9/11 World (2001), Bali Bombing (2002) and Hong Kong SARS (2003). These events serve to benchmark the various variables that are necessary to define and characterize the scope and depth of impact on Travel & Tourism. The model also provides for the input of new events to be factored into the analysis so each new event will serve to enhance the quality of benchmarking.
The variables that are being used to define or characterize a crisis event currently include:
Like the WTTC’s TSA research itself, the crisis forecast covers all components of Travel & Tourism demand including personal consumption, business travel, capital investment, government spending and exports. The forecast will then translate this information into economic concepts of production, such as gross domestic product and employment so the impact can be assessed relative to other industries and the economy as a whole.
It is the policy of WTTC to produce and release a crisis impact forecast only after humanitarian efforts have been fully engaged by authorities and a meeting of the WTTC Crisis Committee has been held to discuss and agree the characterization of the event.
Although the primary audience of this information will be industry and government leaders and is only intended for serious business and policy analysis, WTTC will also publicly release the information through the media and its website to assure the broadest dissemination possible.
Due to the uncertain nature and fluidity of such crisis events, each and every WTTC crisis forecast will be accompanied by a thorough description of the assumptions and characterizations of the event such that any variance from this basis can be understood and communicated to those who may use the information.
WTTC calls upon all Travel & Tourism stakeholders including governments, the private sector and the media to base communications at times of crisis on accurate and informed data. In this way, we can ensure that the impact on Travel & Tourism economies and jobs is kept to a minimum and a speedy recovery facilitated.
Relevant WTTC Research
The UK’s Travel & Tourism industry is one of the largest in the world, ranking fifth overall in terms of absolute size. It is expected to benefit from strong inbound traffic to post GBP34.9 billion (US$66.6 billion) in total Visitor Exports in 2005 or 11.5 per cent of total exports.
Overall Travel & Tourism demand, which encompasses all components of Travel & Tourism consumption, investment, government spending and exports is expected to generate GBP184.9 billion (US$353.4 billion) of economic activity this year.Travel & Tourism’s contribution to the UK economy is illustrated by the direct industry impact of 4.0 per cent of total GDP and the combined direct and indirect impact of 10.1 per cent.
With regard to employment, the UK’s Travel & Tourism industry produces a total 1.1 m jobs or 3.5 per cent of total employment. The broader Travel & Tourism economy (direct and indirect) represents 2.8 million jobs or 9.3 per cent of total employment.
|Also See:||WTTC's 2005 Top Ten List of Travel & Tourism Economies; Tsunami Assessment Given for Thailand, Sri Lanka, and The Maldives / April 2005|
|SARS Has Massive Impact on Travel & Tourism in Affected Destinations / World Travel & Tourism Council Report / May 2003|