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Tourism: A Big Business for Small Businesses.
By Francesco Ianniello
Thursday, 6th December 2007
 
Europe - with its huge historical, geographical and cultural diversity - attracts more visitors than anywhere else.

However, there is increasing competition as other parts of the world develop their charms as holiday destinations. The European Commission has now set out ways in which the EU can help the sector build on its established success and a new web portal channels a wealth of tourism possibilities from 34 European countries.

Tourism is a major industry, characterised by a large number of small and medium-sized businesses, and is fast becoming one of the world's largest economic activities.

At its most narrow, it consists of tour operators and guides, travel agencies, recreation and entertainment, food, transport and accommodation services. But it is also a cross-cutting industry whose fortunes impact on many other sectors ranging from construction to the retail business.

Tourism accounts directly for over 4% of the European Union's GDP. When links to other sectors are included, this rose to over 11% last year, providing 24.3 million jobs – the equivalent of one in eight employed Europeans. By 2016, its share of GDP is expected to increase to 12% and of employment to 13%. Tourism is also one of Europe's most dynamic economic sectors. Its turnover rose by just over a quarter between 1999 and 2002 – it was only outperformed by mining, electricity, gas and water supply, transport and communication – and the number of employees rose by 6% between 2000 and 2002.

In all, 1.4 million enterprises are active in tourism in the EU-25. Of these, 220,000 are hotels and guest houses, ranging from a density of one hotel per 1.1 square kilometres in Malta to one per 489.1 square kilometres in Latvia.

Tourism is also a large foreign currency earner. In 2004, foreign tourists spent over 860 million nights in European accommodation, underlining how Europe is far and away the most important tourism region in the world. With six EU countries in the world's top ten destinations, it represents some 55% of the global industry, well ahead of Asia and the Pacific with 19.3% and the Americas on 16.5%.

However, future growth in the European tourist industry is likely to be below the forecast global annual average of 4.1% as Asia, Africa, the Pacific and the Middle East become increasingly popular destinations. By 2020, Europe's share of the total market is expected to fall to 46%.

Europe's tourist industry is also facing many challenges apart from international competition. It will have to adapt to our changing demography as more elderly people travel and there is greater demand for specific forms of tourism and environmentally-friendly activities.

Strengthening partnership, a renewed tourism strategy

It is to help the sector rise to these challenges and improve its competitiveness that the European Commission has reformulated its approach in the communication "A renewed EU Tourism Policy: Towards a stronger partnership for European Tourism".

The EU has no direct powers in this area, but it can play a key coordinating role helping to ensure Europe remains a most attractive and diverse travel destination. It will also take account when planning measures in other areas, such as transport or regional policy, of the extent to which these can support the tourist industry at the same time.

In general terms, these twin objectives can be achieved through the current better regulation exercise that is reducing unnecessary administrative burdens and through regular contacts with key stakeholders as consultative and policy papers are prepared. As an example, the views of tourism operators are being actively canvassed as the Commission prepares its Green Paper on Maritime Affairs.

The strategy also attaches importance to the boost which EU financial instruments can bring to the sector in a host of areas – regional, research, social, environment, transport, training, rural, fisheries and SMEs.

With the work of the Tourism Sustainability Group, which was set up in 2004, due to be completed by the end of the year, the Commission intends to launch a European Agenda 21 for the sector next year. This will highlight the importance of tourism's economic, social and environmental sustainability.

The strategy also involves increasing understanding and visibility of tourism. This can be achieved through improved and comparable reliable data, and by hosting high profile events during the six-month rotating EU presidencies which bring politicians and practitioners together.

A gateway to European tourist destinations

To help market Europe as an attractive location for visitors, the European Commission has financed the creation of a new portal that opens the door to the bewildering array of tourist possibilities the continent offers.

The portal was launched in March at a European tourism conference in Vienna organised by this year's two EU presidencies: Austria and Finland. Managed by the European Travel Commission, it offers a whole series of practical advice on 34 countries. This ranges from basic information on travel planning – its flight search facility gives a quick scan of over 500 airlines – to the weather.

Users are also provided with comprehensive coverage of major events, details of the many festivals and artistic performances, and easy links to each country's own website.

The Vienna conference brought together ministers and government representatives from the EU-25, accession and candidate countries, the European Free Trade Association, the European Economic Area and the Western Balkans.

As well as witnessing the launch of the portal, participants attended workshops on information and communication technologies, and culture. They were given examples of pioneering projects in these two areas, linking the modern with the traditional as the tourist industry adapts to today's demands.

The conference highlighted the importance of pan-European partnership in welcoming millions of new visitors each year to explore the riches of the continent: there are millions of small businesses looking forward to their arrival.

Contact Francesco Ianniello at: entr-tourism@ec.europa.eu
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