Public sector cuts will lead to a shortfall in the economy, warned a senior tourism figure at consultancy firm Deloitte, which "must" affect growth in the travel industry.
While growth in the private sector will mitigate the effect of the government cuts, it won’t come soon enough to make up for dwindling demand from the public sector.
“I think there is some risk of a gap,” said Marvin Rust, Deloitte’s global managing partner, hospitality.
Speaking to ABTN at Deloitte’s European Hotel Investment Conference, he continued: “In the long run the private sector will more than make up for the public sector cuts and we will have a much more efficient economy.
“But to get to that there must be some point where the total number of people working reduces.”
Rust said this shortfall “must have an influence on demand” for flights and hotel stays, and that the private sector is unlikely to grow fast enough to take up the slack.
As to when this dip is likely to occur, Rust said he couldn’t predict.