WESTERN BUREAU:

AS THE global financial crisis deepens, business travel and medium-size hotels will feel the greatest pinch, Secretary General of the United Nations World Tourism Organisation (UNWTO), Francesco Frangialli, has projected. To prevent a fallout, he has advised governments to provide the tourism sector with credit and warned hoteliers not to lay off employees.

Addressing the media at the recently concluded World Travel Market in London, England, the UNWTO official estimated that the decline in the tourist industry caused by the crisis will last well into the next two years, which, in the long term, may accelerate sustainable development.

Most likely to feel impact

Using a recent International Monetary Fund report as a point of reference, Frangialli named North America and Western Europe as the regions likely to feel the most impact of the economic tsunami, resulting in negative growth.

"And those dependent on them will feel the pinch more than others," he warned.

Stating that it was not the time to panic, Frangialli advised governments against increasing the tax burden on the tourism sector during the tough period ahead. "Governments must be careful not to let stakeholders become victims of the financial crunch. They must have access to credit, because the efforts of marketing and promotion must be maintained at this time," advised Frangialli.

His comments came days ahead of a British Broadcasting Corporation (BBC) report which reported a British Chamber of Commerce prediction that a severe downturn was unavoidable and that the recession in the United Kingdom would be "painful and prolonged".

Rise in unemployment

This follows a sharp rise in unemployment to almost three million. The lobby group expects the government to introduce a significant fiscal stimulus package of between £12 billion and £18 billion before the end of the year, said the BBC.

In reference to Jamaica and several Caribbean islands, 70 per cent of whose tourism business comes from North America, the UNWTO official stated: "All the business tourism will be affected, because if you have less business, you have less travel."

He added that leisure travellers will reduce the duration of their stay, while looking for cheaper accommodation. However, Frangialli pointed out that even though some markets will suffer, "five-star and the lowest categories will prevail; the ones in between will have maximum problem."

Clamouring for incentives

Already feeling the cash crunch, many of the island's hoteliers are clamouring for the establishment of low-interest loans, suspension of the general consumption tax from November to March, and other similar incentives that were granted after the 9/11 crisis, which was the last catastrophe to have affected the industry, sources have confirmed to The Sunday Gleaner.

At least one popular resort in Ocho Rios has closed its doors in response to the crisis and a number of properties have commenced rotation of some of their staff; but the UNWTO official has also warned against this.

"This is not the time to lay off staff; we have to ensure unemployment remains at a minimum," cautioned Frangialli.

- janet.silvera@gleanerjm.com