On a typical weekend afternoon, Beijing's Silk Street Market buzzes with the sound of tens of thousands of tourists haggling over antiques, jewelry and knock-off Gucci handbags. Rickshaw drivers normally scoop up these marketgoers, pedal them to their hotels and return with pockets full of foreign currency a lucrative cycle drivers can repeat dozens of times a day. In recent months, though, the Silk Street Market's once reliable bustle has thinned dramatically. "I haven't seen a single tour bus pulling into the market this morning," says Lao Qian, a 49-year-old rickshaw driver taking a long lunch break. "And I've had a total of three customers since yesterday."
From China to the Caribbean, Thailand to Tanzania, workers in the travel industry can relate to Qian's frustration. Whether it's check-in staff at airports, hotel porters, taxi drivers or restaurateurs, millions of people who rely on tourism for their living are feeling the icy chill of the worldwide recession. Between 2004 and 2007, global tourism boomed, with an average growth of 3.6% a year. But as consumers tightened purse strings and canceled vacations in the second half of 2008, tourism's contribution to the world economy grew by just 1%, the industry's worst performance since the bursting of the high-tech bubble, the outbreak of SARS in Asia, and the terrorist attacks on 9/11 hit international travel earlier this decade. "The last months have been increasingly challenging," says Jean-Claude Baumgarten, president of the World Travel and Tourism Council (WTTC), an organization of travel executives, "and we clearly haven't seen the end of it yet." (See pictures of depressing destinations.)
That's an understatement. During the first three months of this year, China, which in 2004 overtook Italy to become the world's fourth most visited country, saw the number of international visitors drop by more than 7%, and its foreign-tourism revenue shrink by more than 15%. In Spain, year-on-year arrivals dropped by 16% in February the country's sharpest decline in years. And in the tropical islands of the Caribbean and South Pacific, it's a case of surf, sand and empty beach chairs. In February, French Polynesia reported a 30% drop in year-on-year arrivals tourist numbers are now at levels last seen in 1996 while the number of tourists cruising between the islands of Bermuda, Antigua and Barbuda in 2008 sank by almost a fifth. The WTTC estimates the travel industry will contract by 3.5% this year and shed 10 million jobs by the end of 2010.
You might think the last thing we should be worrying about right now is taking a vacation. Who can afford it? Aren't we all meant to be saving and paying off mortgages? But that's to underestimate the size of the global tourism industry and its potential to energize the world economy. By most accounts tourism is one of the world's biggest industries, accounting for 7.6% of the world's workers (220 million jobs) and generating a staggering 9.4% of global income ($5.5 trillion). "If you look at its linkages with other sectors, you see how deeply it cuts into the economy," says Geoffrey Lipman, Assistant Secretary General of the United Nations World Tourism Organization (UNWTO). "Construction jobs, manufacturing jobs, restaurant jobs they can all flow out of tourism."
Industry officials now want governments to start looking at the sector not just as a symbol of the frothy good times but as a way to get economies back on track. "What are governments trying to do in a recession? They're trying to create jobs," Lipman says. "They say, 'Let's bail out the car manufacturers, let's do something about the banks,' and they forget about the major opportunity they have with the travel sector."
A few governments are already moving. In March, Madrid pledged $1.3 billion to modernize Spain's tourism infrastructure in a bid to fight off competition from sunshine destinations like Turkey and Egypt, which have become more competitive as the euro has appreciated. In Spain's Canary Islands, where tourism represents upwards of 60% of the local economy, the municipal tourism board recently began a series of seminars to help tourism workers cast off their perceived grumpiness; course materials advise cabbies to "ensure your taxis smell nice and don't drive too fast" and remind hotel staff that, "a smile costs nothing and is the most effective welcome."
Italy has taken a more traditional route by boosting advertising. In April, the national tourism board launched a $13 million initiative called "Italia Much More" that seeks to lure tourists from the U.S., Canada and Europe with television commercials replete with dramatic opera music and sweeping aerial shots of Italy's landscapes. "The crisis is tangible for everyone and Italy will suffer," says Matteo Marzotto, the head of the National Tourism Board. "We're in the middle of a war."