The world economy is going to decline and risk is going to increase over the next year, said Clemens Fuest, president of the Munich-based Ifo Institute, an economic research body. 

"The world economy is cooling down," said Fuert. "We don't see a recession looming at the moment. But whether we get one depends on what governments do."

He said the risk factors for a recession include a trade war between China and the US, a hard Brexit and the economic situation in Italy.

"If there is a trade war between the world's top two economies – China and the US, the Chinese would likely lose," he said.

No one is sure what a hard Brexit means for Europe – or international travel: The UK is due to leave the bloc in three weeks and there is still no agreement. "This could mean trade and tourism be disrupted," he said.

The economically fragile situation of some members of the Eurozone – namely Italy, which has fallen back into recession – is worrying, he said. "The Italian economy is unique in a bad way – it hasn't grown in 20 years," he said.

And then there is China.

After decades of dynamic economic growth, growth rates in China will likely fall, even if that means 5 percent growth. That could still have a negative impact on other countries which benefit from high Chinese demand – namely European ones.

Meanwhile, the tourism industry is expected to outpace global economic growth over the next few years. However, slowing growth may hit the luxury segment.

"I think that the tourism industry should be aware that income growth at current rates may not continue so that some of the demand may move towards lower cost segments," he said.

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted. Jabeen Bhatti is reporting exclusively for 4Hoteliers.com at ITB Berlin 2019 - www.4Hoteliers.com/itb.

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