Relax - Consumers to keep 2010 travel budget tight

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Consumers to keep 2010 travel budget tight

Reuters | Mon, Nov 16 2009

More than 40 per cent of consumers worldwide plan to travel less next year, and one in three wants to spend less on board and lodging.

Consumers to keep 2010 travel budget tight

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tourism

budget

FRANKFURT - The tourism industry faces another tough year as holiday-makers around the world remain wary about splashing out on trips abroad despite a recent economic uptick, a survey showed on Monday.

More than 40 percent of consumers worldwide plan to travel less next year, and one in three wants to spend less on board and lodging, The Boston Consulting Group said in an industry survey.

"The fact that the economy is broadly recovering does not mean we are out of the woods yet," said Martin Koehler, the global head of BCG's travel and tourism sector.

Official data showed last week the euro zone shook off recession in the third quarter. Economists said the come back appeared to be mostly driven by exports, and part of that was surely due to car sales lifted by scrappage subsidies.

Consumers were still cautious about spending as concern about looming job losses remained, Koehler added. This particularly affected the luxury goods, catering, fashion accessories and tourism industry, the survey showed.

Cutting back the holiday budget made a particular difference for low-income families. "This hurts less than denying your kids the desired toy or your wife a new pair of shoes," Koehler said.

While consumers in Germany and Japan aimed to cut back on travel costs, it was board and lodging that the Italians and the French plan to save money on. In Britain, people would look more for bargains, the survey showed.

The United Nations' World Tourism Organisation has said international tourism will decline by 4-6 per cent this year. Travel companies around the world are struggling to cope with a drop in demand as consumers tighten their travel budgets.

Tour operators like TUI Travel – Europe’s largest –and Thomas Cook have reacted by making bookings more flexible, cutting prices and running special offers.

Thomas Cook’s Neckermann brand for example reacted by offering a guarantee that will allow customers to change or cancel their booking for free up to six weeks before departure, should they lose their job or be placed on shortened working hours for an extended period of time.

(Reporting by Eva Kuehnen and Angelika Gruber, editing by WillWaterman)