*EPF313 01/29/2003
Text: Worldwide Tourism Still Down, U.N. Labor Agency Says
(Political turmoil, slumping economy costing jobs) (1410)

The worldwide tourism industry has lost 6.6 million jobs since 2001 because of political turmoil and sluggish economies, according to a January 29 report from the U.N. International Labor Organization (ILO).

"The expected recovery of the tourism industry in 2002 simply did not occur," said Juan Somavia, ILO director-general in a press release. The industry's growth rate dropped between 1 and 5 percent in 2001 with the worst losses in the Middle East and North America.

According to the full report, countries most affected by the September 11 events were the United States, with international tourist arrivals between September and November 2001 down on average over 30 per cent below the level of the same period the previous year. Countries near the United States also received significantly fewer tourists than at the same time the previous year: Canada (-19%), Cuba (-26%), Dominican Republic (-25%), Mexico (-24%) and Jamaica (-20%).

The report states that new trends indicate tourists are more apt to stay closer to home, that the concept of "sea, sand and sun" adventure travel is becoming less popular, and that travelers are wary of further terrorist attacks such as the October 2002 bomb attacks in Bali.

Southern Europe and China were among the few areas where tourism grew in 2001, according to the release.

Industry officials predict only minimal tourism job gains in 2003, the release added.

Following is the text of the ILO press release. The full report is available at http://www.ilo.org/public/english/dialogue/sector/papers/tourism/impact.pdf

(begin text)

Travel woes, economic downturn cost millions of jobs in world tourism
One in 12 jobs lost since September 2001, says new ILO report

Tuesday 28 January 2003

GENEVA (ILO News) -- Millions of jobs in the world tourism sector have been lost due to political turmoil, the global economic downturn and growing unease among many travellers with little prospect of any recovery in employment in the sector before 2005, according to a new report by the International Labour Office (ILO) issued online today.

The new ILO report entitled "The impact of the 2001-2002 crisis on the hotel and tourism industry," available today on the ILO website, says that during 2001 and 2002, tourism-related businesses shed some 6.6 million jobs worldwide -- putting one out of every 12 workers in the sector out of a job.

"The expected recovery of the tourism industry in 2002 simply did not occur," says Juan Somavia, Director-General of the ILO. "After several years of 4 per cent growth or more, stagnant demand for travel and tourism last year caused a continued loss of jobs with no sign of a turnaround in 2003."

The ILO will hold a Regional Tripartite Meeting on Employment in the Tourism Industry of Asia and the Pacific in Bangkok, 13-15 May 2003 to address the issue of jobs and travel.

The problems facing tourism have had negative consequences in many countries. Conversely, some countries, including China, Croatia, Cyprus, Slovenia, Turkey, Viet Nam and others have reported higher numbers of foreign tourists, apparently due to an influx of travellers from nearby countries who are opting to say closer to home on their holidays rather than visit far-flung places requiring long-haul travel.

As a result, while industry officials believe there may be a modest recovery for the travel and tourism sector in 2003, they are forecasting only minimal job gains. This means the year will likely end with a total of 6.4 million jobs lost since the beginning of the downturn, the ILO says.

Factors hampering a recovery are fears of more attacks on tourists such as those that occurred in Bali and Kenya in 2002, as well as political developments in the Middle East and elsewhere, changing consumer travel preferences and the general state of the global economy, the ILO report says.

According to the report, the hotel and tourism industry has been suffering from the combined effects of a general economic downturn that began in early 2001 and the shock wave from the September 11 attacks in the United States. While economic recession had already brought down the industry's previously strong 4.5 per cent annual growth rate to well below 4 per cent, the industry's growth rate plunged for the whole year 2001 into negative territory between -1 per cent and -5 per cent.

In 2001, receipts from cross-border tourism dropped by 5.1 per cent at constant US Dollar prices and the number of international tourist arrivals worldwide fell by 0.6 per cent. The worst losses were felt in the Middle East and the Americas, particularly North America, where international tourist arrivals were down by 6.8 per cent in the whole year 2001, but as much as 22.6 per cent in the last four months of that year compared to equivalent periods of 2000.

New tourism trends also show an inclination of travellers to stay closer to home. Experts agree that patterns such as "sea, sand and sun"-- and particularly the desire of many tourists to travel to faraway, exotic destinations -- are likely going out of fashion. "Developing countries will face a particular challenge in order to compensate for a decline in long distance travel", said Mr. Somavia. Bali is a good example: After the terrorist attack, the island's tourism industry is trying to make up for the declining number of tourists from Japan, Australia and Western markets by attracting budget tourists from neighbouring countries like Singapore and Malaysia, as well as domestic visitors from Indonesia's main island of Java.

One of the countries most affected by the September 11 events is the United States, with international tourist arrivals having fallen on average more than 30 per cent from the level of the same period the previous year, the report says. Travel expenditure dropped by 5.8 per cent in 2001. There was still no recovery in consumer expenditure levels on travel in the US in 2002 (-0.4 per cent). Although overall travel expenditures in the US are expected to rise by 5 per cent in 2003, reaching the mark of US$ 555.6 million, this result would be still below that of the year 2000.

In the United States alone, employment in the whole industry was down 5.8 per cent in 2001, with an estimated 1.1 million jobs lost. Two-thirds of the estimated 760,000 expected job losses for 2002 in US metropolitan areas are in travel, tourism and related sectors.

Countries near the United States also received significantly fewer tourists in 2001 than at the same time of the year before, e.g. Canada (-19 per cent), Cuba (-26 per cent), the Dominican Republic (-25 per cent), Mexico (-24 per cent) and Jamaica (-20 per cent).

In Europe, countries expecting a high proportion of tourists originating from the United States experienced steep declines in international tourism in 2001, including the United Kingdom (-12 per cent), Germany (-17 per cent), Switzerland (-16 per cent), Italy (-11 per cent) and Austria (-9 per cent). Elsewhere, the Philippines (-25 per cent) and Australia (-21 per cent) registered double-digit declines.

Other countries experienced a significant drop in their 2001 total tourist numbers because, rightly or wrongly, they were associated with security risks not necessarily connected to the September 11 events. These countries included Egypt (-16 per cent), Nepal (-22 per cent) and Sri Lanka (-16 per cent). Morocco's tourist industry recorded a 43 per cent revenue drop in January 2002 compared to January 2001.

Among the rare winners in 2001 were countries in Southern Europe, a region that continues to receive higher numbers of foreign tourists than in previous years, probably because they provide a convenient alternative to long-haul destinations for many European tourists. Thus Turkey (+12 per cent), Croatia (+12 per cent), Slovenia (+11 per cent), Spain (+3 per cent), Greece (+2 per cent) and Cyprus (+1 per cent) all benefited in 2001.

Another winner was China, which experienced an impressive growth in both domestic and inbound tourism. Total annual revenue from tourism has grown on average by 12.7 per cent over recent years, much faster than the country's gross domestic product (GDP), which grew by an average rate of 7.4 per cent.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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