The World Travel Market 2008 report - conducted by Euromonitor International - said that budget carriers and hotels could expand their share of the business travel market as companies look to tighten their belts as many countries head into recession.
It adds that the Middle East and Asian intra-travel markets remain a bright spot for the industry, while tourism operators in the Europe and the United States face an uphill struggle to turn a profit.
"The industry is facing quite a bleak 2009 as the impact of the global financial crisis trickles down into the real economy and it impacts on consumer spending,'' said Caroline Bremner, head of travel and tourism at Euromonitor International.
"That's when the full extent of the crisis will be seen.''
The report was released to coincide with the start of the World Travel Market in London, which is due to be attended by some 48,000 people.
The four-day event, where more than 200 countries are due to be represented by tourism officials, government delegations and tour operators, is this year being held against the backdrop of the evolving financial crisis.
Bremner said that businesses will have to adapt to the coming tougher times, by offering package deals and cheaper vacations and business travel.
"There are signs of people downgrading travel choices to reduce the cost of traveling, a shift from premium,'' she said.
"It may be for businesses in particular, they'll be looking to low cost airlines for lower travel costs.''
Irish low-cost carrier Ryanair has said it is looking at the possibility of trans-Atlantic services if the airline can buy long-haul aircraft at deeply discounted rates from other airlines looking to offload costs.
The airline sector has been hard hit by the global credit crisis, with falling demand adding to already spiralling fuel prices.
The International Air Transport Association has forecast carriers to lose more than $5.2 billion this year, despite falls in the oil price since they reached a peak of US$147 in July.
IATA has also slashed its prediction for traffic volume growth to 2.9 percent, from 4.5 percent previously.
The Official Airline Guide said that the global capacity of winter airline schedules is down 5.2 percent, cutting 46.3 seats, with the U.S. accounting for more than half.
Conference organizers are also pushing a theme of "responsible tourism,'' which they argue could give travel operators a competitive advantage in the tough climate.
Source : STAR
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