PATA’s CEO of straight talk

Pacific Asia Travel Association president and CEO Gregory Duffell explains why it is time for the travel industry to come together and fight for its rights.
PATA’s CEO of straight talk
By Administrator
Sun 19 Jul 2009 04:00 AM

Pacific Asia Travel Association president and CEO Gregory Duffell explains why it is time for the travel industry to come together and fight for its rights.

What are your thoughts on the current global economic situation?

At ITB in Germany there was a lot of apprehension - now we have the first quarter under the belt we find we are still here and that's great news for everybody.

I think it is politicians not understanding the impact of what they are doing, which is not unusual in politics in many countries.

What we are seeing, particularly in the Middle East, is some countries have been affected by the downturn, but not to the same degree as the US and European markets have been and even slightly less even than Asia Pacific.

Asia Pacific, which is PATA's territory, is showing a quarterly decline of about 7% overall, which is not disastrous - it's bad, but not disastrous.

There are signs that the decline rate is slowing, which is good news and we are seeing that in the Gulf already.

Everyone panicked in January and February with the dramatic drop and then suddenly it has smoothed out a little bit and everyone is looking for that turnaround, but we all still have the feeling it's going to be a long year and for many markets it's going to be a really tough low season.

We can all survive a moderate high season, but if you have a bottom low season when you have no cash, that's when people get laid off and businesses fail.

That's going to be tough for a lot of smaller operators and destinations, but I have seen some innovative packages entering the market and that's good.

What advice are you giving to the members of PATA?

We are trying to engage the membership and to get them to understand there are opportunities out there.

It's a case of how to exploit what you have in your hand.

If you are a hotel and your occupancy revPAR is down 30%, it still means you have 70% of your rooms filled. So what are you doing to maximise and take advantage of that, what sort of incentives are you offering? I don't see enough of that in the marketplace.

If you are throwing a lot of marketing dollars at trying to get that 30%, quite frankly you are probably not going to get much movement there - those people will not travel for probably 12 months.

Concentrate on the 70% and play with that and that's the message we are trying to get members to understand.

You have been fairly vocal in raising your concerns about certain government's reactions to the downturn, particularly the UK, why do you feel some of them are getting it so wrong?

I think it is politicians not understanding the impact of what they are doing, which is not unusual in politics in many countries around the world.

But what is frustrating in the UK is you see the government announcing stimulus for different sectors including tourism, handing out millions of dollars on one hand and then immediately taxing them and taking them on the other.

This is illogical and the consumer and the public must understand that. Taxing travel among all industry sectors, which is pretty much the lowest margin industry sector other than agriculture, is suicidal and that's why we are very frustrated with the UK government at the moment for not looking at that.

We are not against tax, but use it as a stimulus and if you are going to stimulate an economy, if you try and pump money in at the top end nothing comes out of the bottom and we are talking about getting people buying again.

You have to pump the stimulus in the bottom end and tourism fits in the bottom end of the economy.

Is there any positive news for travel and tourism in the current downturn?

The good news I hear is that governments view tourism as a major sector. Here in the Gulf, Dubai tourism represents 19% of GDP and indirectly 33%, so a third of the economic situation is impacted by tourism and I would argue that is the same for most developed countries in the world.

Governments are realising "oops, maybe we ought to look at this again".

It's good news for us as an industry so can we come out of this more solidified.

We still see many governments who have industry sectors and tourism is tagged on the back of something else - this could actually be a time when tourism becomes its own industry sector again, which I think will be very positive for the industry.

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