The Chicken and the Egg: Tourism
and Air Transport Linkages
Chris Lyle
Representative of the World Tourism Organization to ICAO
ICAO/McGill Worldwide Conference
Air Transport: What Route to Sustainability?
Montréal, 26 September 2010
International tourism and air passenger
transport: Locked at the hip
International air passengers are predominantly
tourists (business and leisure travellers)
Over half of international tourist arrivals are by air
(increasing yearly, with much higher proportions for
long-haul destinations)
International tourism and air passenger transport
traffic and revenues tend to move in lockstep, with
tourism being more resilient in times of uncertainty
when tourists stay closer to home
Some current trends in tourism
impacting on air transport
Travel to destinations closer to home (“staycations”)
and mode transfer away from aviation at short-haul
Decline in average length of stay (“breakneck breaks”)
“Hypermobility”
Later booking
Segments such as VFR, repeat visitors, special
interest and independent travelers more resilient
Some current trends in air transport
impacting on tourism
“Front end” traffic and yield – cyclical or slowing
(increased use of videoconferencing, etc)?
Legacy carrier focus on consolidation and primary
routes, with potential loss of service on “thin” routes
Strengthening market share and generation of new
tourism streams by LCCs in short- and mediumterm, but lesser advantage at long-haul and
particular susceptibility to low margins, returning
high fuel prices and withdrawal of “subsidies” (eg
low airport charges)
Current central challenge common to
tourism and air transport
Economic instability
2009: An exceptionally challenging year
International tourist arrivals, 1995-2009*
1000
900
900
846
801
800
million
919
760
682
700
600
566
591
608
682
701
880mn
690
632
533
500
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
Return to growth at end of 2009
International Tourist Arrivals, monthly evolution
(% change)
15
10
5
0
-5
-10
-15
2008
2009
Source: World Tourism Organization (UNWTO) ©
2010
UNWTO Panel of Tourism Experts
175
Better
150
125
Equal
100
75
Worse
50
25
Prospects
Evaluation
T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3
'03
'04
'05
'06
'07
'08
'09
'10
Source: World Tourism Organization (UNWTO) ©
2010: Forecast maintained
12
10.1
10
7.8
8
5.3
6
Change (%)
4
Forecast 2010:
Between 3 and 4 %
5.6
6.4
3.8
3.5
2.8
2.1
2
0.0
0
-1.5
-2
-4
-6
1999
*Preliminary results
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Evolving drivers




Discretionary income and Demographics
Motivations and Activities
Cybernetics (age of the ePurse)
Competition and Consolidation
International Tourism Expenditure
(US$ billion)
Everybody chasing the
Chinese tourist…
100
90
Germany
80
United States
70
60
50
United Kingdom
China
40
France
30
Italy
Japan
Canada
Russian Federation
Netherlands
20
10
0
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Source: World Tourism Organization (UNWTO) ©
UNWTO/European Travel
Commission report on
‘Demographic Change and
Tourism’ just released
Sustainability challenges for tourism
and air transport




Fuel prices and economic cycle
Security and Facilitation
Climate change
Economic liberalization
Economic liberalization
 Tourism sector well advanced and functional
 Air transport stalled and isolated:
Bilaterals and blocs
Air carrier ownership and control
Institutional self-interest
Same game
Different rules
Progressive liberalization
Bilateral “Open Skies” agreements (mostly in
small markets), but “traditional” bilateralism still
prevails between regions
Regional liberalization agreements including
“Open Aviation Areas” (with “cabotage” and
regional air carrier ownership, some more
effective than others)
EU-US “Open Skies” agreement (stalled on air
carrier ownership and control)
Liberalization snapshot
 Pace has slowed, with detriment to tourism and
more general economic and social development
 Economic environment has produced:
For the nervous - retrenchment to focus on 3/4
freedom traffic and protection of “national”
carriers
For the bold – use of aviation as a successful
stimulus to economic recovery
A plurilateral approach?
Waiver of national ownership and control
provisions in bilaterals
Agreement amongst two or more parties
automatically extended to another party upon
adherence to the agreement
Air carrier ownership and control
 Well-crafted liberalization would:
Open doors to investment
Reduce the need for indirect means of obtaining
market access (alliances/code-sharing, etc)
Improve safety and security regulation
Limit uncertainty regarding liability , and…..
Produce substantial economic benefits for air
transport, tourism and the economy at large
Ways forward
US draft discussion document on a “Multilateral
Convention on Foreign Investment in Airlines”
IATA’s “Agenda for Freedom”
ICAO’s Air Navigation Services Conferences –
from bilateral to plurilateral?
GATS Annex on Air Transport Services
2020
1.6 billion international tourists,
spending $5 billion per day
“Level of penetration of the ‘real’ potential population
in tourism in 2020 can be seen to be 7 per cent –
truly an industry still in its infancy.”
UNWTO: Vision 2020
Further information:
www.unwto.org
clyle@airtransporteconomics.ca