The annual Global Trends Report (GTR) for tourism shows that the international tourism industry has been hit hard by the recession.

The report, published yesterday (9 November) at the World Travel Market in London, UK, shows that the industry has performed far worse during the past 12 months than initially expected.

Global arrivals are now anticipated to decline by 8 per cent during 2009 from already low levels in 2008, while hotels will finish the year 16 per cent short of the occupation levels seen the year before.

Overall air sales globally are down 14 per cent from 2008 levels, building further pressure on an already troubled industry. The International Air Transport Association (IATA) estimates that overall losses suffered by airlines will exceed US$11bn during 2009.

Business tourism has been the hardest hit, with global revenues from corporate travel plummeting by a whopping 40 per cent.

Faced with financial constraints and fluctuating currency markets, consumers have looked to alternative destinations and methods of travel - and in some cases abandoned foreign travel entirely and instead opted for domestic breaks.

Nowhere else have the effects of the weak pound and strong Euro been so clear than in Spain, which relies heavily on the UK for inbound tourism. According to GTR, revenue per available room (RevPAR) in Madrid will fall by 40 per cent by the end of the year.

These falls have had a dramatic effect on Spain's unemployment rates. The country, which until 2006 had the world's second largest tourism industry, now has 20 per cent of its population out of work.

Caroline Bremner, spokesperson for Euromonitor International, which compiled the report, said: "The global financial crisis is taking its toll on the travel industry - falling expenditure, lack of credit and rising unemployment caused a slump in confidence and demand.

"Consumers have shunned luxury and traded down, although the lipstick effect - clinging to life's small luxuries - was apparent with spas and golf tourism continuing to be popular."