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The global economy continues its multi-speed recovery, with a slowdown expected in
2011, curbed by advanced economies’ austerity measures and weakness in the Eurozone.
• The threat of a double dip recession looms over the USA and the UK.
• Travel demand will continue to lag as consumer and business confidence struggles to
regain momentum, through unemployment, debt and curtailed spending.
• However, the travel industry has turned a corner with improving demand leading to greater
pricing power. Business travel is experiencing an upswing after the slump.
• IATA reported growth of 8.1% for H1 2010 in world passenger traffic, but a slowdown in
H2. A profitable year is expected for 2010 overall, despite the ash cloud crisis.
• Consolidation continued apace, with merger activity for some (Continental/United, Thomas
Cook/Co-operative Travel) and bankruptcy for others (Mexicana).
• Discount-prone categories - hotels and travel retail – are suffering from the effects of
discounting, as leisure demand remains weak and value for money key.
• Asia, especially China, is storming ahead and integral to expansion, offering powerful
economic growth and a burgeoning middle class, yet with a prevalence for saving.
• Technology companies are dictating the pace of change from mobile applications
to social media. Delta’s Facebook booking page sets the bar for others to surpass.