Fuel Prices Have Little Impact on Travel Says WTO

November 16, 2005

Fuel Prices Have Little Impact on Travel Says WTO
November 16, 2005 – The United Nations World Tourism Organization is reporting that higher oil prices have had limited effect on international tourism growth.

According to a recent report by WTO, the impact of high oil prices in international tourism has been little so far. Experts noted that only a small percentage of the increase in oil prices as been passed onto consumers in terms of final purchase price, says WTO Chief of Market Intelligence, Augusto Huéscar. Additionally, the imposition of surcharges by many airlines does not appear to have discouraged demand for air transport.

Demand for international tourism has remained strong through 2005. WTO’s estimates for the year show that 2005 is expected to end with a growth of 5 to 6 percent in international tourist arrivals.

The full WTO report on the impact of high oil prices in international tourism will be published next month. The report is expected to highlight that recent crises in higher oil prices had no direct impact on tourism. The effect was rather indirect, as price hikes contributed to the deterioration of the economic situation, and consequently to the corrosion of consumers’ purchasing power.

"But, while the past oil price peaks had a significant negative impact on tourism through to the economy at large, on this occasion the global economy has remained relatively steady and the inflationary pressure appears to be limited for now" underscores WTO Secretary-General, Mr Francesco Frangialli.

Barring other unforeseen shocks, WTO is confident that tourism will "continue to show healthy growth globally", albeit with changes in the strength of particular generating markets and destinations and perhaps a bigger push in intra-regional travel, says Mr. Frangialli.

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