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 knockoff 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 that 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 are feeling the icy chill of the worldwide recession. From 2004 to ’07, 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 just 1%, the industry’s worst performance since the bursting of the tech bubble, the outbreak of SARS in Asia and the 9/11 terrorist attacks hit international travel earlier this decade. “The last months have been increasingly challenging,” says Jean-Claude Baumgarten, president of the World Travel & Tourism Council , an organization of travel executives, “and we clearly haven’t seen the end of it yet.” That’s an understatement. During the first quarter 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 more than 7% and its foreign-tourism revenues shrink more than 15%. In Spain, year-on-year arrivals dropped 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 there are now at levels last seen in 1996. The WTTC estimates the travel industry will contract 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 is taking a vacation. Aren’t we all meant to be saving and paying off mortgages But that’s underestimating 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, employing 7.6% of the world’s workers and generating a staggering 9.4% of global income . “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 U.N. World Tourism Organization . “Construction jobs, manufacturing jobs, restaurant jobs–they can all flow out of tourism.” Industry officials now want governments to start looking at the sector 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.”
