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March 14, 2009

ITB UPDATE: KEY TRENDS AND LEARNINGS – time for radical change!

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The Cape Town Tourism stand at ITB Berlin 2009

Despite the economic downturn, the 43rd ITB Berlin 2009 opened on 11 March with almost the same number of exhibitors as last year – 11,098 companies from 187 countries.

Whilst issues around climate dominated the agenda in 2008, ITB 2009 was overshadowed by debate on the impact of the global economic crisis on the travel and tourism industry. Whether because of climate or economy (which are inter-related anyhow), one thing is evident: the tourism and travel world will change fundamentally, for good.

Whilst change is not easy, I argue that it is not just essential for survival, but essential for success. I love change – it forces innovation and does away with mediocrity. It allows the maverick and the creative to shine, the extraordinary to thrive. It is an opportunity to unleash your instinctive curiosity and creativity, making full use of the window of opportunity. By merely improving on something old, you have not changed anything. You have to invent, transform and move away from the old, completely!

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Outside ITB Berlin 2009

The numerous themes, special days and new initiatives at ITB Berlin reflect the diversity of the travel and tourism industry. Some of the events included a corporate social responsibility day, a travel bloggers’ summit, a business travel forum, an aviation day, a special report on culture and tourism, and a focus on optimising city destinations.

“The many uncertainties within this sector make this outstanding marketplace more important than ever,” Messe Berlin’s Chief Operating Officer, Dr Christian Goke, said at the opening of the event. “Not only are trends on display here, but it is above all a place where business is negotiated at international level.”

The message from the United Nations World Tourism Organisation (UNWTO) on behalf of its member states and the industry as a whole was clear: put tourism and travel at the core of stimulus packages and the Green New Deal.

They are calling for the industry to join the Roadmap for Recovery.

Taleb Rifai, secretary-general ad interim, underscored that “tourism means trade, jobs, development, cultural sustainability, peace and the fulfilment of human aspirations. If ever there was a time to get this message out loud and clear, it is now, as we meet at a time of over-riding global uncertainty, but also of immense possibilities.”

He echoed the sentiment of world leaders that tell us that we are facing the biggest challenge of the past half-century:

“There is the immediate crisis consisting of a credit crunch, economic disarray, mounting unemployment and recessionary reduction in market confidence, with no telling – for now – how long it will last.

Coupled to the crisis are the long-term systemic imperatives of climate-change response, job creation and poverty alleviation.

This situation puts unrelenting pressure on our customers, our employees, and our markets, driving us to radically alter our existing policies and practices.

Whilst the industry has always demonstrated remarkable resilience in the face of what can only be described as catastrophy, it has always come out stronger and healthier. This juncture seems to be different. The global status of this crisis and unclear parameters necessitate a different mindset.”

Enter the tourism and travel sector’s “Roadmap for Recovery”.

First: We must approach the situation with realism. Markets started to deteriorate in mid-2008. While UNWTO figures show international arrivals hit a record 924-million last year and annual growth of 2%, the second half of the year tracked the monthly decline in macroeconomic results and forecasts. Arrivals experienced negative growth of -1% during the last six months of 2008. The same is true of international receipts: record highs till mid-2008, but rapidly declining second-half growth. This is an indication of the trend forecasted for the current year. This is the reality.

Second: We must take every action to shore up our own defences, so that we can weather the storm and emerge intact and even stronger on the other side when the good times return – as they surely will. We must maintain and preserve, in as much as we can, our valuable structures and trained workforce.

Third: We must also recognise that the measures we need to take now will require unusual action. The complex, interconnected and dynamically unfolding nature of this crisis makes it unpredictable. The future operating patterns for global economies will be vastly different from the past: the very nature of consumerism will change and so will our markets and our prospects. It is the time to revisit our existing structures, policies and practices. It is time for innovations and bold action.

Fourth: In taking these measures we must make use of every advantage. We must harness the immense power of technology, modern communications including the Internet, and the new consumer-orientated marketing to reduce costs, operate with new efficiencies and manage risk in an environment of uncertainty and constant change.

Fifth: We can benefit by putting the tried and tested model of public-private partnerships on the front burner to navigate through the turbulence and beyond. We need to identify best-practice economic and operational models and help embed them in markets around the world. And we need to fight the worst practices like excessive taxes and red tape, complex regulation and duplication that increase our costs and reduce the value of our products. It is time for solidarity.

Sixth: Remind the world and government that “Travel means jobs, infrastructure, trade and development.”

Seventh: Help the poorest grow tourism, fight climate change and advance development.

Lastly: Put tourism and travel at the core of stimulus packages and the Green New Deal. This is even more relevant in a country like South Africa.

As a member of the UNWTO and in particular, the International Destination Council, Cape Town Tourism was invited to present its marketing and business strategy as part of the newly established “Tourism Resilience Committee” agenda at ITB. I will share some further highlights in PART TWO of the ITB Trends and Learnings Report.

In essence the committee focuses on the provision of a framework for better market analysis, collaboration on best practices and policymaking. It will become a continuing focal point for crisis response for the tourism sector around the world.

I echo the message of Mr Rifai: “This is not the time to retract and retrench. It is not about crisis management, but rather opportunity management”

Tourism must be at the heart of stimulus packages because the jobs and trade flows generated by a strong tourism sector as well as business and consumer confidence in travel can and will play a big part in bouncing back from recession and will engineer new opportunities.

We must continue investing in marketing, but not marketing in the traditional sense of the word. These extraordinary times call for extraordinary ideas and action. We must convince decision-makers and governments that spending on tourism promotion can pay massive returns across entire economies because visitors are exports.

We must be at the forefront of innovation and of real solutions to the challenges that face our fragile world.

The UNWTO’s continued commitment to lobby the developed world to help the poorest countries and Africa, in particular, to develop their economies faster and seriously respond to climate change, is commendable.

So, whilst some are hoping for a speedy recovery, I argue that a recovery to what was the past is not what is needed. It would be detrimental to our sector’s future well-being if we returned to the comfortable and now irrelevant past. We need to shape a new destiny and a new roadmap through bold leadership and innovation. The solutions to current challenges and the key to future success do not lie in our past. I do not want to see Cape Town recover; I want Cape Town to lead the way to a new dawn. I want radical change!

Along our journeys, Cape Town Tourism has learned that leading the way is not safe, but we remain committed to being relevant and remarkable. Michael Schrage says in his book, Serious Play: “Those who are willing to invest in and test unproven ideas, based on a hunch or a gut reaction, are likely to find their noses bloodied, routinely. But, by the act, they increase the odds, dramatically, of joining the small set of true world beaters who shape tomorrow’s extraordinary contours.”

See part two and part three of Mariëtte du Toit-Helmbold’s ITB report.

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