Tourism conference clouded by falling shares and terrorism

The annual convention of the Association of British Travel Agents opened in Cairo yesterday with a party hosted by the Egyptian Prime Minister at the Giza pyramids.

But with mounting problems facing the travel industry, some delegates chose not to attend. Two speakers from the beleaguered MyTravel group cancelled their planned presentations. David Crossland, the company's chairman, had been billeted to speak, but cancelled on the day that MyTravel's share price collapsed. Tim Jeans, managing director of the new subsidiary low-cost airline MyTravelLite, was due to address delegates, but is remaining in Britain because of the crisis afflicting the parent company. There will certainly be no respite from the firm's competitors; this week easyJet ordered enough new aircraft to carry the entire population of Britain in a year.

Convention organisers do not plan to stage a formal debate about last week's bombing in Bali. But many agents and operators have expressed concern about government warnings of attacks on tourists. Stephen Bath, the Abta president, said: "Not to travel is frankly giving into terrorism."

One travel agent criticised the Foreign Office for its travel advice, saying: "They're even telling people to watch out for terrorists in New Zealand. It's a pathetic over-reaction."

South-east Asia has continued to be a profitable region for operators after 11 September last year, but the prospect of further attacks has hit sales to destinations such as Malaysia and Thailand.

There is also alarm about the prospects of war in Iraq; the 1991 Gulf War saw a sharp decline in travel and tourism.

The convention is crucial to Egypt, which is heavily dependent on overseas visitors for its foreign revenues. Britain is the country's third-largest market, supplying 300,000 tourists a year, and the presence of so many travel agents is seen as an opportunity to promote the country. Cairo was a controversial choice of venue for the conference, which has previously been staged in "safe" destinations such as Spain, Greece and Portugal.

Security for the convention, the first to be held in an Arab country, is extremely tight. Until the Bali attacks last Saturday, Egypt was the scene of the worst terrorist attack on tourists. The massacre at Luxor in 1997 left 58 overseas visitors dead. Tourists are routinely taken around the country in armed convoys, and the committee arranging protection for Abta delegates includes three Egyptian generals.

The agenda will also focus on issues concerning the UK. Abta has criticised the Government's proposals for a new airport to be built at Cliffe on the Thames Estuary. Ian Reynolds, the association's chief executive, said: "We feel it would be too costly, and would create the greatest environmental damage."

He called for Gatwick airport to be expanded, saying passengers would balk at the extra time needed to travel to Stansted if the extra capacity was built there instead. An agreement with West Sussex County Council rules out a second runway at Gatwick until at least 2019.

Overall, the market for package holidays for the summer season just ending is expected to be between 5 and 10 per cent down on the previous year. Forward bookings for next summer are also showing a decline. Research carried out for Abta indicates that two in five people who take package holidays say they are likely to book travel and accommodation separately next year, which could take another big bite out of the operators' traditional market.