The global tourism industry is recovering from the blow dealt by high-profile terrorist attacks to travellers' confidence, the World Travel and Tourism Council (WTTC) has said.

...the industry will need more time to recover from the impacts of 11 September than we expected at the start of the year Jean-Claude Baumgarten, president, WTTC

The industry's hopes of restoring its fortunes after the suicide plane hijacking attacks on the US last year were hit by a bomb attack on a popular resort on the Indonesian island of Bali in October which killed at least 200 people.

But WTTC's latest research suggests the industry's worst fears have not been realised, although the Bali bomb has knocked 1.9% off the industry's expected revenues for 2003.

The holiday market is being supported by strong consumer spending, the WTTC says.

Better than feared

If so, the industry is benefiting from the rush by central banks in the US, Britain and the eurozone to cut interest rates, in an effort to keep people spending, after last year's September 11 strikes.

Many countries told citizens to avoid SE Asia

"We now see industry output in 2002 as flat rather than the declining levels we were expecting in the spring," the WTTC said.

It now expects the travel industry to decline by 0.1% in 2002, rather than the 0.4% it estimated in March.

The travel industry supports about 200 million jobs worldwide, or every 12th worker.

Revenues from tourism will total $4.2bn (�2.6bn) this year, according to the research, drawn up for the WTTC by the Oxford Economic Forecasting research group.

Bali effect

Prospects for 2003 have been "dampened" by the bombing in Bali, and the continuing risks from terrorism in several countries.

The WTTC now envisages "a solid 4.1% real growth" in 2003.

This contrasts with the 6% growth it previously hoped for in 2003 when it last set out the industry's prospects in March.

The possibility of US military action against Iraq and the fragility of the world economic recovery are also clouding the industry's outlook, the WTTC says.

"The fundamental message... is that the industry will need more time to recover from the impacts of 11 September than we expected at the start of the year," said Jean-Claude Baumgarten, WTTC president.

The WTTC is holding a conference in London on 13 November is discuss how to improve security in resorts.