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Labor issues in Tourism

by Chris BeddoeTourism Concern
January 30th, 2004

Tourism represents a growing 70 per cent of service exports of less developed countries and in 2003 worldwide receipts for international tourism amounted to US$474 billion, corresponding to US$1.3 billin a day3. In 2003 the world’s travel and tourism industry was expected to generate over 67 million jobs and generate 3.7 per cent of GDP; and the broader travel and tourism economy was expected to generate – directly and indirectly – 194 million jobs. Yet despite the importance of human resources in tourism and the contribution to the global economy, there is a dearth of research on labour issues. This is partly due to the fragmented tourism economy characterized by seasonal, part-time, and often family-based employment but also due to attitudes towards service industry jobs as non-professional or casual work. In some sectors of the travel and tourism industry there is a high turnover of staff but this often goes hand-in-glove with low wages, long hours, no professional development and no promotion opportunities. The seasonality of tourism and the immediate sensitivity to local, regional and global crises affect tourism jobs like no other sector.

In contrast to the predictions of the World Travel and Tourism Council (WTTC) an analysis published by the ILO last May, entitled New threats to employment in the travel and tourism industry – 2003, showed the horrendous effects of global events such as the war on Iraq and SARS on job creation and job losses. In the Asia-Pacific Region, the travel and tourism industry closed the year 2003 with a loss of 2.8 million jobs. It will have lost no less than 5 million jobs since 2001, the year when the crisis in the world’s tourism industry started.

The tourism sector is linked both vertically and horizontally. The large European tour operators own retail sales outlets, airlines, hotels and other services. In recent years four of the largest European tour operating companies have bought up a wide range of smaller and diversified operators and now four major companies control over 50 per cent of the business leaving the UK. When contracting with other key suppliers such as hotels, the tour operators have the ultimate power to negotiate on rates of accommodation. In times of crisis in a price sensitive market the tour operators can push rates so low that the squeeze is felt throughout the destination. The direct impact of this is felt most severely on employees.