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4 Nov, 2013

11 Key Issues Tourism Ministers will sweep under the carpet at WTM London

Exclusive analysis by Travel Impact Newswire Executive Editor Imtiaz Muqbil

BANGKOK – Like all travel industry forums globally, the World Travel Market, which opens in London today, is becoming a mutual-admiration club of people preaching to the converted. The programme of events has the usual air of “sameness” to it – bursting with techno-babble interspersed with awards ceremonies, updates on destination marketing plans, new product launches and responsible tourism. I will not be at the WTM; it’s no longer worth the time, expense and effort. Rather, I will be covering a forum of Asian transport ministers in Bangkok this week. The outcome of that meeting will have a more far-reaching impact on Asia-Pacific travel & tourism than anything that will be discussed at the WTM London.

Two prominent events at the WTM London are the presentation of industry forecasts and the meeting of industry tourism ministers. If past record is any indication, these will focus only positive, upbeat developments. However, in order to provide an “alternative perspective” and inject some balance into the discourse, I have compiled a list of 11 key issues that will impact travel & tourism industry well into the future. I know they will NOT be on the agenda of the tourism ministers meeting. However, if only a few readers grasp their value as early-warning indicators, the list may safeguard them from falling victim to the law of unintended consequences in an increasingly unstable and unpredictable world. Prevention is better than cure.

1. Creating versus managing growth: The industry has excelled in creating growth, by focusing on clear deliverables such as economic benefits and job creation. The one billion international arrivals mark was crossed last year. Continuing developments in infrastructure, facilitation, transportation networks, and the increasing emphasis on tourism being placed by both provinces, states and cities means that there will be no shortage of numerical growth. Hence, the age of creating growth is over. The age of managing growth has begun. Dealing with the social, cultural, environmental, physical and even geopolitical consequences of tourism growth is the order of the day. Having largely swept these issues under the carpet over the years, there is scant evidence that the industry is prepared to deal with them. As always, it will wait for problems to become crises first.

2. Leakage: Add up the amounts of money leaving the developing countries to pay for the costs of capital equipment, software, technology, management, marketing, franchise, booking commissions, training and other fees, plus all the imports, and the actual net earnings from travel & tourism begin to look a bit thin. Over the years, satellite accounting systems were used to estimate tourism industry earnings. However, their focus on turnover provided an excessively rosy and skewed picture of the impact of travel & tourism earnings on national and global economies. If such figures are re-calculated on the basis of a more realistic profit-and-loss balance sheet, the actual “bottom line” may look very, very different.

3. Grassroots Benefits: While travel & tourism’s claim to be a major job-creator is absolutely true, a significant number of these jobs involve migrant labour. This dependence will grow in future, leading to major shifts in global demographics. There are virtually no statistics to prove if and how people at the bottom rung of the ladder are benefitting in terms of savings, remittances and decent jobs. Providing grandiose figures about expenditure on shopping and dining is deceptive. Travel & tourism has made little attempt to examine the extent to which the benefits really trickle down to migrant labour and people at the grassroots.

4. Tax evasion: Multinational corporations, many of whom are active members of the World Travel & Tourism Council and the World Economic Forum, long have been calling for tax-breaks as a means of spurring growth. But cash-strapped governments are wising up. Many of these same MNCs are being targeted by tax authorities on suspicion of tax evasion and tax fraud, which has been facilitated by their global presence (known as globalisation). A number of international agreements have been forged by the European Union, the United Nations, the OECD and others to track global money movements, especially the vast amounts parked in offshore tax havens. This will gain ground; governments are putting tax evaders in the same category as speculators.

5. Speculators: Speculators have become a global scourge. Be it currencies or commodities, their ability to manipulate prices and rates can make or break economic development strategies. The UN Conference on Trade and Development (UNCTAD) has done extensive work to document the detrimental impact of speculators and global markets. Their activities aggravate instability in travel and tourism and disrupt everything from airfares to marketing budgets to food prices. Travel and tourism has never done a serious analysis of this impact.

6. The “value” of security: Security costs are becoming a huge burden for travel & tourism which is paying both the costs and the price of global instability and the inability of global leaders to solve many problems at source. Again, no cumulative figures exist on how much the industry has had to pay since 9/11 and the “value” it is getting in return. As there is no such thing as 100% security, the “cost” of this service is akin to  an extortion racket. Airports and aviation sector have been the prime customers so far. The security industry is salivating at the prospects of providing “solutions” to the NextGen customer segments (transport, hotels, convention centres, department stores, malls and other public places) for years to come.

7. Crimes against tourists: The huge growth in visitor arrivals is leading to a corresponding increase in crime against tourists, ranging from credit card fraud to taxi-scams, fake jewellery sales and assault. Again, no global figures are available. No destination wants to get a “bad image.” This is another short-sighted recipe for disaster. Tourists are falling victims to crime everywhere. The resulting bad publicity does far more damage to a destination than coming clean with a problem and taking preventive-cum-remedial measures.

8. Racial profiling: This has become a serious issue at visa-processing centres and border checkpoints. There is compelling evidence to prove that Muslims, and those assumed to be Muslims, are the primary victims. Numerous civil liberty groups have kept copious records of such blatant discrimination in the United States and to a lesser extent in Europe and other Western destinations. In many of these same countries, it is a punishable crime to discriminate against Jews, but apparently open season on Muslims. Not a single international travel and tourism or transport association has mustered the courage to challenge these double-standards.

9. Privacy: The recent revelations of spying by the U.S. National Security Agency are only the tip of the iceberg. Travel & tourism has become almost entirely dependent on technology. Behind the scenes, I.T. suppliers, reservation systems, credit card companies, loyalty programmes are harvesting huge amounts of data that yield immense power to influence purchasing decisions as well as social, economic and political movements. Who has control over this information and what checks and balances are in place to prevent abuse and provide channels for redress? Travel & tourism industry forums only focus on how to harness the sunny-side-up potential of new-fangled technologies. What goes on behind the scenes and the right of consumers to know is ignored. That head-in-the-sand attitude is a recipe for disaster, as the NSA spying allegations are proving.

10. Casinos: The Asia-Pacific region is seeing a proliferating emergence of casinos, both legal and illegal. The legal ones are major revenue spinners and play a major role in the development of destinations. But they are also known as conduits for money-laundering and tax evasion, and also cause social and family problems due to debts and gambling addiction. Again, such data is rarely researched. As usual, these side-effects are never addressed in travel forums.

11. Sexual harassment This is an unseen problem in travel and tourism, which is a major employer of women. Very little documentation exists of its true extent. UN bodies such as the International Labour Organisation are bringing it out into the public domain. India has passed laws against sexual harassment. It is only a matter of time before lawsuits begin to fly as industry employees become aware of their rights and take action against any perceived sense of discrimination and/or sexual harassment overtures.

Conclusion

In political circles, a widely-circulated epithet says that it is only when people lead that the leaders follow. The travel & tourism industry leadership is now at the cusp of that reality check. Like global demographics, travel & tourism faces a midlife crisis. Its longevity and sustainability depends on how well it prepares both to take advantage of the opportunities as well as cope with the challenges and looming threats. If recognising that a problem exists is the first step towards solving it, this article is designed to do exactly that.

  • Geoffrey Lipman

    This is well written, accurate and worth reading. I call it putting green in the same place as growth

    • imtiazmuqbil

      Approved

    • Jörn Gieschen

      True, Geoffrey. I know you’re at it, good luck with your efforts!

  • Jörn Gieschen

    Fully agree, Imtiaz. Wonder if it’s possible to get a keynote slot with a presentation of these issues at one of the big conferences. Worth a try…

  • Sriporn Bhekanandana

    can’t agree more with your article especially this is the time to focus on managing growth and solve or at least try to solve the unsolved problems.