Global tourism predicted to slow after best year ever

The World Travel and Tourism Council says it has seen a recovery in markets such as Africa. Above, a man walks on the land at Ha Mampho village, Lesotho. (AP)
Updated 22 March 2018
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Global tourism predicted to slow after best year ever

LONDON: The travel and tourism sector is set for a modest slowdown in 2018 as a result of higher oil prices and airfares, a year after it experienced its best year on record, according to a leading global industry body.
In its annual Economic Impact Report, the World Travel and Tourism Council said Thursday that the sector was responsible for the creation of 7 million new jobs worldwide in 2017, or one in five new jobs.
That was due largely to the fact that the sector outperformed the global economy for the seventh year running, growing by 4.6 percent against 3 percent. The sector, according to the organization, outperformed all others.
“2017 was the best year on record for the travel & tourism sector,” said Gloria Guevara, president and CEO of the WTTC. “We have seen increased spending as a result of growing consumer confidence, both domestically and internationally, recovery in markets in North Africa and Europe previously impacted by terrorism and continued outbound growth from China and India.”
Though the WTTC forecasts 2018 growth of 4 percent as a result of higher oil prices and airfares as well as expectations of rising interest rates in countries such as the US and the UK, it kept its long-term forecasts unchanged, with average annual growth of 3.8 percent over the next decade. By then, it expects the sector to support more than 400 million jobs globally, or one in nine of all jobs.
“As our sector continues to become more important both as a generator of GDP and jobs, our key challenge will be ensuring this growth is sustainable and inclusive,” Guevara said. “Already in 2017, we have begun to see a backlash against tourism in some key destinations.”
So-called overtourism is imperiling cherished buildings, straining infrastructure and harming the experience of travelers and local residents alike. Tourism-phobia has become increasingly prevalent, particularly in European destinations such as Barcelona and Venice, where visitors crowd the same places at the same time. The WTTC is involved in efforts to spread tourists around destinations and smooth out demand over time.
Oxford Economics helped in the compilation of the report, which covers 185 countries.


OPEC urges producers to increase oil capacities

Updated 17 October 2018
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OPEC urges producers to increase oil capacities

  • Oil prices have rallied this year on expectations that US sanctions on Iran will strain supplies by lowering shipments from OPEC’s third-largest oil producer
  • Crude oil demand is expected to increase by 14.5 million barrels per day (bpd) from 2017 to 111.7 million bpd in 2040

NEW DELHI: OPEC Secretary-General Mohammad Barkindo on Tuesday urged oil-producing companies to increase capacities and invest more to meet future demand as spare oil capacity shrinks worldwide.
Oil prices have rallied this year on expectations that US sanctions on Iran will strain supplies by lowering shipments from OPEC’s third-largest oil producer. Brent crude breached four-year highs to reach $86.74 a barrel earlier this month, the highest since 2014.
“Countries that are holding spare capacity are now shrinking because there has been less investment in exploration,” Barkindo said on the sidelines of the IHS CERA conference. The global oil sector needs about $11 trillion in investment to meet future oil needs in the period up to 2040, Barkindo said, adding that import-dependent countries such as India were concerned about future oil supply.
Crude oil demand is expected to increase by 14.5 million barrels per day (bpd) from 2017 to 111.7 million bpd in 2040, OPEC said in its September report.
Saudi Arabia is the only oil producer with significant spare capacity on hand to supply the market if needed, and the Kingdom plans to invest $20 billion in the next few years to possibly expand its spare oil production capacity.
Barkindo said the oil markets were currently adequately supplied and balanced, but cautioned against a potential imbalance in 2019 owing to higher supply.
“We will continue to ensure that the balance that we have attained after four years will be sustained going forward,” he said.
Members of OPEC and non-OPEC countries participating in a supply-reduction agreement are on course to reach 100 percent compliance, Barkindo said, calling it a “work in progress.”
OPEC and allied producers — not including the US — agreed in June to return to 100 percent compliance with output cuts that began in January 2017, after months of underproduction in Venezuela and elsewhere pushed adherence above 160 percent.
India is expected to account for about 40 percent of the overall increase in global demand for the period ending 2040, Barkindo said. Demand for oil in the world’s third-largest oil importer is expected to rise by 5.8 million barrels per day (bpd) by 2040.
“India is projected to see the largest additional oil demand (3.7 percent per annum) and the fastest growth in the period to 2040,” said Barkindo in his speech to the conference.
Indian officials have flagged worries about the outlook for crude supply though oil producers have downplayed a potential shortfall.
India, which imports more than 80 percent of its oil needs, shipped in 4.2 million barrels per day (bpd) of crude in 2017.
India has sought easier payment terms from oil suppliers to combat higher crude prices.
Retail fuel prices in India recently touched record levels due to high oil prices and a weakening rupee, leading to protests across the country.