A Q&A with WTTC chief David Scowsill

By Johanna Jainchill
Just over a year into his tenure, David Scowsill, president and CEO of the World Travel and Tourism Council (WTTC), will preside over the WTTC Summit for the second time. Editor at Large Johanna Jainchill asked Scowsill about some of the challenges the travel industry faces in 2012 and about his first year on the job.

David ScowsillQ: What do you expect to be the most important items on the agenda at this year's summit?

Probably the biggest issue that will emerge from the summit is a consensus among the travel and tourism leaders over where the world and our industry are heading in the next 12 to 24 months. The tectonic plates of global politics, economics and business are in a state of dynamic flux, which will have profound implications for our industry as a major driver of the world economy.

Q: Did governments respond to the WTTC's plea at last year's conference to ease up on visa restrictions?

Yes, the summit did indeed "ring the bell" for the need for action, not just talk. ... The U.S. is now highly engaged in improving the visa system, as evidenced particularly by the president's executive order on establishing visa and foreign visitor processing goals and the task force on travel and competitiveness as posted on the White House website.

The Travel Association Coalition has been formed now, with its first focus on improving the visa system, not just in the U.S. but globally. We are working in partnership with the U.N. World Tourism Organization to assess the systems and procedures now in place globally and the economic impact that could be realized through changes in some of the systems.

Q: Has the travel industry continued to rebound at the pace you expected it would?

Even better. Travel and tourism is set for a milestone year, as the industry's direct contribution to the global economy is expected to pass $2 trillion in GDP and 100 million jobs.

The global travel and tourism industry will grow by 2.8% in 2012, marginally faster than the global rate of economic growth, predicted to be 2.5%.

When the wider economic impacts of the industry are taken into account, travel and tourism is forecasted to contribute some $6.5 trillion to the global economy and generate 260 million jobs, or one in 12 of all jobs on the planet.

Q: Which sectors of the travel industry do you have the most concern for, and why? Which sectors seem to be thriving?

The future of the aviation sector is subject to significant uncertainty, and commercial profits are showing extreme fluctuation in response to energy and environmental factors. But forecasts predict strong growth in passenger numbers, from 2.5 billion in 2007 to some 6 billion by 2026, as well as in the sector's direct economic contribution, which could reach $1 trillion within a decade.

However, the latest news from IATA is not good. Overall profitability for the sector was 1.2% in 2011 and will be as low as 0.6% in 2012. Economic turmoil resulting from a failure in governments to resolve the eurozone debt crisis could cost the industry $8 billion in 2012.

Despite being hard hit by the global economic recession in 2008 and 2009 -- and the Costa cruise disasters in 2012 -- both in terms of passenger demand and global cruise value sales, the cruise sector has been one of the fastest-growing sectors of travel and tourism over the past 10 years and, indeed, over the last two to three decades.

The hospitality sector is the backbone of the tourism industry. ... It is very difficult to talk about this industry globally as the performance varies across regions. [Last year] saw growth in occupancies and [average daily rates] for all regions except for North Africa/the Middle East. And, so far, indicators are positive for 2012. Only Asia-Pacific has experienced a slight fall in occupancy rates, reflecting tailing off of demand.

Q: Did you accomplish what you'd hoped to in your first year as head of the WTTC?

My first year as president and CEO of WTTC has flown past. ... We are making great progress around coordinating lobbying efforts with other travel associations, campaigning on key industry issues. The European campaign against the Air Passenger Duty tax was a forceful example of this new approach.

Q: Oil prices are back up again. How much of a concern is this to the travel industry?

The economic and travel and tourism impacts depend on how long higher oil prices are sustained and how monetary and fiscal authorities respond.

Oil prices are again putting the global recovery at risk. A 20% rise in oil prices since December has been largely driven by concerns of a disruption to global oil supply from political tensions over Iran's nuclear program.

Oil-price rises this year so far have only reduced 2012's GDP growth by 0.2 percentage points. But a rise in the price of a barrel of oil to $200 or above would have a severely negative impact on growth.

Among the developed economies, the largest impact is likely to be felt in the U.S., the most oil-intensive of the major economies. And due to its comparatively low rate of tax on gasoline, the rise in the oil price will result in a sharp rise in inflation.

Follow Johanna Jainchill on Twitter @jjainchilltw. 
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