BERLIN -- "The short-term trend in tourism is very simply explained: It is gloomy."
That was the concise assessment of Jean-Claude Baumgarten, president of the World Travel and Tourism Council, who was here last week to present the WTTC's annual economic outlook at ITB, the world's largest travel trade show.
Economic growth, Baumgarten said, was negative in every travel metric the group monitors, with the exception of government spending.
The WTTC, whose 101 members represent many of the world's largest and most influential companies, hired the Oxford Economics research firm to analyze travel and tourism within the context of the broader global economy.
Oxford Economics' managing director, Adrian Cooper, described current conditions as "the worst contraction the world economy has suffered in over 50 years. What's striking is the way that all areas of the global economy are in recession simultaneously."
Cooper predicted that in addition to the $1 trillion in bank losses already experienced, a second wave of bank losses will reach at least another $1 trillion. The second wave will be sparked by loan defaults resulting from rising unemployment and business insolvencies.
Subsequent declining production will lead to further cuts in investment, jobs and market activity in general, and those who keep their jobs will become more cautionary when managing their personal finances.
Asked if business insolvencies would include travel and tourism companies, Baumgarten's answer was emphatic: "Definitely. It's starting now in the airline industry. Those units that have merged will have to consolidate. The old notion of the flag carrier will disappear.
"As far as hospitality goes, in times of crisis, big is good, strong brands are good," he added.
He predicted that because there are a lot of small and midsize hotel companies in Europe, that market in particular will likely see a lot of consolidation.
Cooper noted that "banking crises take time to correct. Even when dealt with well, it has historically taken a minimum of three years."
He believes the upcoming six months in particular will be "very difficult." But there is good reason, he said, to think the situation will stabilize by the end of the year, thanks in part to looser monetary policies, fiscal stimulus packages and other aggressive governmental policies.
Cooper called the drop in the prices of oil, food and metals commodities "very helpful" and likened it to a lowering of taxes, courtesy of the oil-exporting companies.
Baumgarten also added a bright note: Despite the U.S. role in the current economic recession, all indicators suggest that "the U.S. will continue to be the largest travel and tourism economy in the world" at least through 2019, the limit of WTTC forecasting.