ABU DHABI, United Arab Emirates -- As the global travel enterprise enjoys a level of growth that could soon make it the world's largest industry, 1,000 government and industry leaders gathered here last week for the 2013 World Travel & Tourism Council Global Summit to hear a diverse group of experts explore the industry's future as an international engine of economic, social and environmental change.
The summit's opening day was handed over to industry outsiders: an Oxford professor, an economist from the Boston Consulting Group, an environmental activist, a soft drink marketer and former President Bill Clinton.
Audience members, including government ministers and the CEOs of some of the world's largest travel companies, were given a glimpse at what these experts believe the world will look like in the future.
While the speakers did not agree on all points, the picture that emerged was one of surprising technological developments that will have us living longer and computing faster; of economic and population growth that is likely to be uneven geographically; and of a hyperconnected world that carries significant risks as well as opportunities.
Some speakers leaned significantly toward optimism, while others listed into pessimism. One perspective on uncertainty was offered in a keynote speech by Clinton, who observed, "It's not overly complicated. There are very few permanent victories, very few permanent defeats. The important thing is to keep stumbling in the right direction."
For Oxford professor Ian Goldin, who studies future issues, each new technological doorway that opens to progress can also be exploited by "the bad." Future success, he said, depends upon systems having "resilience," by which he meant the ability to quickly identify and contain everything from cyber attacks to biological viruses.
Goldin also expressed concern that well-established governments were so preoccupied with their own economic issues that no one was paying attention to the very real, large-scale issues that have arisen due to globalization and technological advances. And emerging nations, he said, aren't ready to do so yet. To create the necessary system resilience, "these issues need to be thought through" globally, but "no one's focused."
In his opening remarks, WTTC CEO David Scowsill did paint a rosy picture of expected industry growth, fueled in large measure by the expanding economic power of China. Goldin backed him up: Based on recent consultation with Chinese leaders, Goldin forecasted that Chinese gross domestic product will rise 7% for at least 15 years -- a prediction he called conservative, even though it exceeds the widely cited assumption of 6.5% growth for China.
Even so, Scowsill, cognoscente of the potential for problems, advised that industry leaders focus on "serving people, planet and profit."
It might not have been a coincidence that "profit" was mentioned last. Recent global travel and tourism performance has the industry expanding faster than the general global economy. It seemed to be taken for granted by many speakers that travel and tourism will become the world's largest industry in the not-distant future.
Daniel Stelter, an economist with the Boston Consulting Group, offered the most pessimistic outlook, predicting that the U.S. would pull its economy out of the doldrums but that Europe will be "stuck in red" for the foreseeable future.
Jonathan Porritt of the Forum for the Future recalled that when he first consulted on environmental issues to WTTC in 1994, he found a chronic "lack of awareness, indifference and hostility" to environmental concerns within the group.
While he is now embraced by the organization, he said the industry still must "decouple from becoming the [perceived] world's biggest destroyer of nature."
Just as economic issues must be dealt with on a global basis when crises hit, so must environmental issues, Porritt added. "I hate to be the bearer of bad news," he said, "but this planet has finite resources."
He presented a call to action on climate change, describing 2012 as "the worst year ever" in terms of acceleration of global warming. As a result, for the travel industry in particular, he said, "value is at risk." But on the other hand, Porritt said, "no other industry is capable of doing so much good as travel and tourism."
Coke's global chief customer officer, Sandy Douglas, speaking about consumers, cautioned that "the individual has more power than ever," thanks in large measure to social media.
"It's the consumer's world, and we just work here," Douglas said. "Once, we controlled the product, method and means of communication. But now, they own the conversation, and on good days, we're part of it. They own our brands."
Travelport CEO Gordon Wilson and Marriott CEO Arne Sorenson were called to the stage to react to the nonindustry speakers.
The industry and consumers alike, Wilson said, will have to get over the "misapprehension that [social and environmental] responsibility is more uncomfortable or more expensive."
Sorenson said he felt the previous speakers had "nailed it." Pressure on the environment and the ability for people to exercise power "will create chaos," he predicted, but he also expressed confidence in the industry's ability to evolve and cope with change.
Clinton spoke of his belief in tourism's power to transform countries, especially those nations emerging from crises. He said he saw it happen in the former Yugoslavia and is working with his Clinton Foundation to make it happen in Haiti.
"What you do for a living is good for the earth," he told industry leaders.
He said that he brought up the benefits of tourism to Israelis and Palestinians during peace negotiations, describing it as "a peace benefit."
Like Goldin, Clinton warned that greater connectivity and interdependence can have two opposing outcomes. "It leads to either conflict or cooperation," Clinton said. Noting that cooperation is what makes people successful, he said, "I'm betting that cooperators win out."
As a result of advances in technology, shifts in economic power and regional uncertainties, Clinton said, "We are in a world that is becoming," and if we focus on our differences rather than on similarities, on conflict over cooperation, "things will go badly."
"It's a huge deal," he said.
The highlight of the second day of the conference was a forum for three global airline chiefs who, when they weren't bashing regulations, taxes and unions or praising consolidation and profitability, offered insight into the evolution of alliances and the future of London Heathrow and alternative fuels.
Tony Tyler of IATA, Willie Walsh of International Airline Group (the holding company for British Airways and Iberia) and Etihad's James Hogan comprised a panel moderated by CBS News travel editor Peter Greenberg.
Hogan led with a monologue that set the tone, criticizing taxes and regulations and saying that without "radical change," it will be tough for legacy airlines going forward. He called for "affordable access to growth markets," singling out India in particular as making it difficult for airlines to move quickly.
Walsh called the reduction of U.S. airline capacity by 14% "the best change the industry has seen." He said that "when five -- soon to be four -- airlines carry 85% of the market, it's not about chasing market share, but chasing profitability."
Tyler said an individual airline's profitability, or lack of it, was a matter of geography to some extent. The U.S. made a profit, Europe did not, and the aggregate profit worldwide was 1.3%.
"We might soar to the dizzying heights of 1.6% in 2013," he added.
Walsh led the attack on Britain's air passenger duty tax, which was assailed in sessions throughout the day.
"Not a penny goes to airlines or to address environmental problems," which was the justification for instituting the tax, Walsh charged.
Hogan added that German taxes have hindered Air Berlin, a carrier in which Etihad has an equity stake. Taxes, he said, "damage airlines."
The increasing rate of airlines investing in other airlines, which Hogan dubbed "equity alliances," was another recurring theme. Hogan, whose Etihad also has stakes in Virgin Australia, Aer Lingus and Air Seychelles, said that such arrangements have benefits that go beyond route networks, and that by joining forces, he gets better prices on everything from engines to interiors.
Walsh recalled that when alliances were first formed, "the view was initially that alliances would involve cross-equity. Ultimately, that wasn't seen as necessary, but now that's being looked at again. Alliances are a poor substitute for consolidation."
Alluding to Scowsill's calling on travel leaders to "serve people, planet and profit," a tweet flashed on an overhead screen during the airline leaders panel, noting, "A lot about people and profit, but what about planet?"
Greenberg asked Tyler if airlines accepted that global warming was inevitable. Tyler replied that the question might have been legitimate in 2005, but today IATA's goals toward carbon reduction were clearer and more progressive than those of most industries.
On the topic of alternative fuels, Walsh said that the technology exists but that nothing immediately could match "commercial realities."
"The problem is price," he said. "The volume of [available] biofuel is small and expensive."
He said his company was funding research, but he called upon governments to "step forward and assist" with decisive investments in biofuel that would "de-risk" the costs to airlines.
Current air traffic control systems contribute to carbon emissions, Walsh said, adding, "It's truly shocking, the amount of fuel that's wasted" due to inefficiencies in traffic control systems.
"It's a disgrace," added Tyler.
Flights into Heathrow are assumed to have a minimum of 10 minutes' delay, Walsh said, but a third runway, which would ease congestion, is not in the cards. It was, Walsh said, politically untenable. "Fifty years from now, I expect there will be only two runways."
The practical effect of Heathrow runway congestion, Walsh said, was that the airport is slipping in the ranks of international hubs. Heathrow, which has been No. 1 in traffic since 2000, will be passed by Dubai either this year or next.
"I expect that in 10 years, it won't be in the top five, and in 20 years, won't be in the top 30," he said. Walsh noted that the year Heathrow first took over the top spot, Dubai was ranked 90th.
When discussing regulations and politics, Greenberg raised the question of whether cabotage laws that forbid foreign carriers from entering domestic markets should be discarded.
"If the U.S. opened its markets, I don't think many international airlines would go in," Walsh replied. He said that for the purpose of current open skies agreements, Europe is regarded as one country, yet Europe's national carriers are not flying to the U.S. from cities outside their own borders. The exception is Open Skies, a small subsidiary of British Airways that flies to the U.S. from Paris.
Email Arnie Weissmann at [email protected] and follow him on Twitter.