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European Tourism in 2013: Trends & Prospects (Q1/2013) 1

EUROPEAN TOURISM in 2013: TRENDS & PROSPECTS

Quarterly Report (Q3/2013)

A quarterly insights report produced for the Market Intelligence Group

of the European Travel Commission (ETC)

by Tourism Economics (an Oxford Economics Company)

Brussels, November 2013

ETC Market Intelligence Report

Copyright © 2013 European Travel Commission

European Tourism in 2013: Trends & Prospects (Q3/2013)

All rights reserved. The contents of this report may be quoted, provided the source

is given accurately and clearly. Distribution or reproduction in full is permitted for

own or internal use only. While we encourage distribution via publicly accessible

websites, this should be done via a link to ETC's corporate website,

www.etc-corporate.org, referring visitors to the Market Intelligence Section.

The designations employed and the presentation of material in this publication do

not imply the expression of any opinions whatsoever on the part of the Executive

Unit of the European Travel Commission.

Data sources: This report includes data from the TourMIS database /

http://www.tourmis.info, STR Global, IATA, AEA and UNWTO.

Economic analysis and forecasts are provided by Tourism Economics and

are for interpretation by users according to their needs.

Published and printed by the European Travel Commission

Rue du Marché aux Herbes, 61, 1000 Brussels, Belgium

Website: www.etc-corporate.org

Email: [email protected]

ISSN No: 2034-9297

This report was compiled and edited by:

Tourism Economics (an Oxford Economics Company)

on behalf of the ETC Market Intelligence Group

Cover: Colosseum in Rome, Italy

Photo © Shutterstock / S. Borisov

http://www.etc-corporate.org/

http://www.tourmis.info/index_e.html

http://www.etc-corporate.org/

mailto:[email protected]


© European Travel Commission, November 2013

Foreword

Strong international demand supports European tourism

Preliminary results for the first three quarters of 2013 point to a

strong performance of tourism in Europe. UNWTO1 estimates

point to a 5% year-to-date growth, which is well above

Europe’s long-term trend and close to growth in world’s fastest

growing regions.

Most of the 32 destinations reporting foreign visits through

May-August post positive growth. A strong performance is

reported by Europe’s largest destinations, such as the UK

(+6%), Spain (+5%), Germany (+4%), Austria and Italy (both

+3%). Almost all the medium-sized destinations report above

average growth in the range of 5% to 7% increases and

destinations moving from a small base even reach two-digit

growth. Flat growth is reported by Scandinavian destinations,

while Cyprus (-5%) and Belgium (-2%) continue to struggle.

Consumers remain cost-conscious and consolidate the trend

towards shorter stays, as suggested by a more moderate

growth in overnights compared to arrivals. A notable exception

is Bulgaria (+6% in arrivals and +8% in overnights), which

actively tackles seasonality through product diversification.

Data also point to a higher than usual concentration of visits

during the summer months, which puts additional pressure on

destinations congested during their peak season.

International travel from the UK and France eventually

rebound, on top of a strong performance of the German

market. Travel demand from Russia persists at high growth

levels, turning this market into a consistent source of visitors

for a growing number of ETC destinations. These results offset

the negative performance of the Netherlands and Italy, two

large source markets challenged by a negative economic

climate.

Travel from the US remains solid, although growth somewhat

slowed throughout the year, reflecting business and consumer

confidence stall over fiscal uncertainty. The Chinese travel

market remains the fastest-growing market for most ETC

destinations, supported by the rise of personal incomes and

living standards. After a false start, Japanese outbound travel

shows signs of improvement through the summer months,

although the effect of economic stimuli remains uncertain.

1 UNWTO, World Tourism Barometer, Volume 11, October 2013.

International Tourist Arrivals in 2013*, % p.y.

Source: UNWTO * estimate

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

World Europe Asia and thePacific

Americas Africa Middle East

Foreign arrivals to select destinations

2013, year-to-date*, % change year ago

Year-to-date growth…

Source: TourMIS * date varies by destination

-15

-10

-5

0

5

10

15

AUT CYP EST IRL ITA LVA LTU SRB SVN ESP GBR

...through June … through August

European tourism and the economy

Annual % change

Source: UNWTO, IMF *provisional data

-15

-10

-5

0

5

10

15

08/07 09/08 10/09 11/10 12*/11

International tourism receipts International tourist arrivals GDP

2 European Tourism in 2013: Trends & Prospects (Q3/2013)


Destinations in Europe successfully capture growth potential, but remain exposed to

changes in aviation strategies

Targeted strategies are the solid foundation of Europe’s growth. Ireland (+7%) reaps the benefit of “The

Gathering Ireland”, a global campaign targeting the 70 million people Irish diaspora, while Germany

(+4%) consolidates growth through a theme year focussed on young travellers. Other ETC members

capitalise on the international exposure received through large-scale events, such as Italy on the

occasion of the Pope’s election, Lithuania (+8%) through the Presidency of the EU Council and Slovakia

(+16%) celebrating Kosice as European City of Culture for 2013. Strengthening the perception of a good

value-for-money tourism destination contributed to make Hungary (+6%) increasingly attractive to

international travellers.

The coordination between tourism and aviation turned out to be crucial for the success of destinations

such as Malta (+9%), Croatia (+6%) and Portugal (+8%), who benefit of route expansion. Opposite side

of the same coin, Estonia subdued growth (+3%) is mainly linked to route cuts with airports in Germany

and the UK, with trickle down effects on travel from markets connected via these hubs. Similarly, Finnair’s

strategy to focus on Asian routes exposed Finland’s tourism sector to a reduced accessibility from its key

markets, as reflected in the destination’s flat growth.

Tax burden could halt European tourism take-off

There have been encouraging signs that an economic recovery is underway in Europe, although annual

growth is estimated at 0% in the EU and -0,4% in the euro area. Prospects for next year point to a

gradually increasing pace of growth, pointing to 1,4 % in the EU and 1,1 % the euro area in 20142,

underpinned in many cases by the significant structural reforms and fiscal consolidation.

Tourism remains one of the best performing sectors in many European economies, and a significant

source of income and labour. Tourism may be seen as an increasingly appealing source of government

revenues through additional taxation. Instead, tourism resilience should be an incentive for governments

to build a legislative framework that encourages growth in this sector, as this would spread over the

broader economy. “Croatia is a success story in this respect”, says Eduardo Santander, Executive

Director at ETC. ”The Croatian government approved a 50% cut in VAT on tourism services at the

beginning of this year. This measure provided tourism businesses margin to compete on price with more

cost effective destinations. International visits to Croatia grew by a promising +4% through August and

tourism positively contributed to economic growth3”.

ETC Market Intelligence Group

ETC Executive Unit

2 Source: http://ec.europa.eu/economy_finance/eu/forecasts/2013_autumn_forecast_en.htm.

3 Source: http://ec.europa.eu/economy_finance/publications/european_economy/2013/pdf/ee7_en.pdf.



2013 Tourism Performance Summary

4 The figure for international tourist arrivals in Italy (2.5%) is based on data from “Osservatorio Nazionale del

Turismo”, as the definition of indicators is more consistent with reporting by most other destinations. According to

the source “Bank of Italy”, international tourist arrivals (Jan-Jul) are -1.1%. However, the lower figure reflects

different tendencies between the travel with overnight stays (2.5%) and daily visits (-7%).

Initial data available for the peak summer months suggest some clear improvement in

travel demand for European destinations. Increased tourism demand coincided with a

pick-up in economic fortunes as the Eurozone economy emerged from the longest

recession in three decades in mid-2013.

Of the 25 European destinations reporting inbound travel trends through at least May, a

full 23 report that arrivals have been higher than in 2012 (using data reported through

TourMIS). Growth markets account for over 80% of tourist arrivals in these reporting

destinations. However, there remain some notable weak points in terms of both

destination and origin markets despite the improvement. A rapid rebound to growth rates

seen in previous upturns remains unlikely.

Growth in the key summer months has accelerated from earlier in the year. Of the 23

destinations reporting arrivals growth for the year to date, a majority reported stronger

growth in the more recent data than earlier in the year.

Some of the larger markets have seen improvement during the summer including Spain,

UK, and Italy. The markets which have seen acceleration during the summer account for

around half of all arrivals in reporting destinations including Italy, which is reporting

growth of 2.5% through July4.

But the picture is not overwhelmingly positive with a soft summer performance for some

destinations, while travel from some large European origin markets, including Germany,

the Netherlands and Italy, remains subdued.

Tourism demand within Europe remained resilient throughout the recession. With a return

to economic growth, we expect to see some stronger growth in tourism demand from

Western European markets moving into 2014. But there is less scope for a strong

rebound than has been seen in other recovery periods. Demand has also been supported

by some growth from emerging markets, including from Eastern Europe and this source

of demand is expected to slow.

Cyprus stands out towards the bottom of the growth table and has experienced very large

falls in arrivals for the year to date. Falls were particularly marked earlier in the year

around the time of the financial crisis. Arrivals fell 14% in April alone.

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-5

0

5

10

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Icela

nd

Slo

vakia

Se

rbia

Latv

iaM

alta

Lithuania

Hungary

Irela

nd R

ep

Cro

atia

UK

Bulg

aria

Pola

nd

Gre

ece

Sp

ain

Monte

negro

Germ

any

Esto

nia

Neth

erlands

Austr

iaS

lovenia

Italy

Rom

ania

Czech R

ep

Belg

ium

Cypru

s

Foreign visits to select destinations2013, year-to-date*, % change year ago

Source : TourMIS *date varies (May-Aug) by destination

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-15

-10

-5

0

5

10

15

20

Slo

vakia

Latv

iaS

erb

iaM

alta

Po

rtug

al

Bulg

aria

Lithuania

Hungary

Pola

nd

Spain

Germ

any

Cro

atia

Neth

erlands

Monte

negro

Sw

itzerland

Ro

ma

nia

Esto

nia

Austr

iaC

zech R

ep

Sw

eden

Luxem

bo

urg

Slo

venia

Fin

land

Denm

ark

Norw

ay

Belg

ium

Cypru

s

Foreign visitor nights in select destinations2013, year-to-date*, % change year ago




Travel demand for the period June-September is crucial for the year as a whole given the

volume of travel in these summer months, accounting for around half of all arrivals.

Overwhelmingly positive trends for the year to these months are very encouraging signs for

the industry in 2013 and into 2014.

Country % ytd to month % ytd to month

Austria 2.6 Jan-Aug 1.7 Jan-Aug

Belgium -1.5 Jan-Jun -3.2 Jan-Jun

Bulgaria 5.8 Jan-Aug 7.5 Jan-Jul

Croatia 6.0 Jan-Aug 4.0 Jan-Aug

Cyprus -5.3 Jan-Aug -8.6 Jan-May

Czech Rep 1.3 Jan-Jun 1.5 Jan-Jun

Denmark -0.9 Jan-Aug

Estonia 3.4 Jan-Aug 2.1 Jan-Aug

Finland 0.2 Jan-Jul

Germany 3.6 Jan-Aug 4.1 Jan-Aug

Greece 4.6 Jan-Mar

Hungary 6.6 Jan-Aug 5.9 Jan-Aug

Iceland 20.0 Jan-Aug

Ireland Rep 6.5 Jan-Aug

Italy 2.5 Jan-Jul

Latvia 11.2 Jan-Jun 10.8 Jan-Jun

Lithuania 8.0 Jan-Jun 7.0 Jan-Jun

Luxembourg 0.6 Jan-Aug

Malta 8.7 Jan-Aug 9.2 Jan-Aug

Montenegro 4.0 Jan-Aug 2.3 Jan-Aug

Netherlands 3.0 Jan-Jun 3.5 Jan-Jun

Norway -1.5 Jan-Jul

Poland 5.0 Jan-Jul 4.7 Jan-Jul

Portugal 7.8 Jan-Jul

Romania 2.3 Jan-May 2.2 Jan-May

Serbia 11.3 Jan-Aug 9.3 Jan-Aug

Slovakia 16.1 Jan-Jun 11.5 Jan-Jun

Slovenia 2.5 Jan-Jun 0.3 Jan-Jun

Spain 4.5 Jan-Aug 4.5 Jan-Aug

Sweden 1.3 Jan-Aug

Switzerland 2.3 Jan-Jul

UK 6.0 Jan-Aug

Source: TourMIS, http://www.tourmis.info; available data as of 29.10.13

Measures used for nights and arrivals vary by country

See TourMIS for further data including absolute values.

International Arrivals International Nights

Tourist Arrivals and Nights

2013 Performance, Year to Date


© European Travel Commission November 2013

Global Tourism Forecast Summary

Tourism Economics’ global travel forecasts are shown on an inbound and

outbound basis in the following table. These are the results of the Tourism

Decision Metrics (TDM) model, which is updated in detail three times per year.

Forecasts are consistent to Oxford Economics’ macroeconomic outlook according

to estimated relationships between tourism and the wider economy. Full origin-

destination country detail is available online to subscribers.

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

World 5.5% 4.3% 4.5% 4.4% 5.5% 4.3% 4.8% 5.6% 4.5% 5.9%

Americas 3.9% 4.6% 3.2% 4.5% 5.1% 3.2% 5.4% 3.2% 4.4% 5.2%

North America 3.0% 4.4% 3.4% 4.0% 4.8% 0.2% 5.0% 2.5% 4.0% 4.8%

Caribbean 2.2% 4.3% 1.8% 4.1% 4.0% -5.0% 4.5% 5.5% 5.8% 6.4%

Central & South America 7.9% 5.2% 3.4% 6.0% 6.9% 16.4% 6.9% 4.9% 5.2% 6.2%

Europe 7.5% 3.6% 3.7% 3.4% 4.5% 3.6% 4.1% 3.8% 3.3% 4.7%

EU 6.9% 2.5% 1.9% 2.6% 3.4% 1.5% 1.2% 1.4% 2.7% 4.0%

Non-EU 9.5% 7.5% 9.3% 5.8% 7.6% 11.3% 13.5% 10.6% 5.1% 6.3%

Northern 11.6% 0.5% 2.8% 3.3% 4.7% 4.4% 2.3% 1.4% 2.9% 3.7%

Western 4.5% 2.8% 0.4% 2.0% 3.5% 3.9% 1.5% 1.6% 3.4% 4.0%

Southern/Mediterranean 7.8% 1.9% 3.8% 4.0% 3.8% 1.0% -1.1% -0.4% 0.9% 2.6%

Central/Eastern 8.8% 8.1% 7.9% 4.7% 6.6% 4.4% 11.6% 9.5% 4.9% 6.9%

- Central & Baltic 6.4% 6.1% 4.5% 2.1% 4.9% -4.1% 2.3% 5.2% 3.5% 6.7%

Asia & the Pacific 6.3% 7.0% 6.5% 6.7% 7.7% 7.3% 8.4% 7.9% 6.5% 8.0%

North East 3.8% 6.1% 3.7% 7.8% 8.2% 7.7% 9.5% 8.5% 7.7% 8.4%

South East 10.2% 9.4% 11.3% 5.4% 7.8% 5.2% 8.1% 7.1% 2.7% 6.6%

South 12.2% 5.7% 3.9% 7.0% 5.7% 11.0% 0.2% 6.1% 7.6% 9.5%

Oceania 2.8% 2.3% 5.0% 4.3% 5.0% 7.1% 4.9% 5.4% 6.5% 5.8%

Africa -6.2% 7.8% 4.5% 4.2% 4.8% 4.1% 2.7% 5.7% 2.2% 4.6%

Mid East 2.6% -5.3% 8.5% 4.6% 6.7% -0.4% -4.0% 11.3% 4.9% 6.3%

* Inbound is based on the sum of the country overnight tourist arrivals and includes intra-regional flows

** Outbound is based on the sum of visits to all destinations

EU = Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Germany, Hungary,

Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia,

Slovenia, Spain, Sw eden, UK

Non-EU Europe is all European countries (listed below ) outside EU

Northern Europe = Denmark, Finland, Iceland, Ireland, Norw ay, Sw eden, UK

Western Europe = Austria, Belgium, France, Germany, Luxembourg, Netherlands, Sw itzerland

Southern/Mediterranean Europe = Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy, Malta,

Montenegro, Portugal, Serbia, Slovenia, Spain, Turkey

Central/Eastern Europe = Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan, Lativia,

Lithuania, Poland, Romania, Russian Federation, Slovakia, Ukraine

of w hich

Central Europe & Baltic countries = Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia

Inbound*

TDM Visitor Growth Forecasts, % change

Outbound**



Recent Industry Performance

Subdued growth but improvement in summer 2013

Tourism demand has picked up in summer 2013 after a slower start to the year,

with clear improvement in developed markets including Europe.

European airlines continue to achieve record load factors and notably on intra-

European travel with efficiency improvements.

Long-haul demand for European tourism continues to grow and regional demand

has improved.

Hotel occupancy rates improved during the summer months.

Room rates are also rising suggesting increased confidence about future growth.

Air Transport

Global air passenger transport demand has picked up

during the summer months but growth remains lower than

longer-run trends. Passenger demand in the three months

to August was 6.2% higher than in the previous year,

indicated by revenue passenger kilometres (RPK). This is

a clear acceleration from the 4.9% increase in the prior

three months. Acceleration co-incides with the

improvement in economic demand trends in some

developed markets and we expect the early 2013 dip to

mark the trough in this slowdown.

Clear regional differences are evident with summer

improvement in passenger growth related to North

America and Europe. Some emerging markets are still

slowing, and notably Latin American growth in 2013 to

date is slower than in the previous three years. Demand

in APAC countries has improved somewhat in recent

months, but demand earlier in the years was heavily

disrupted by geo-political factors.

0

5

10

15

20

Africa Asia/Pacific Europe LatinAmerica

Mid.East N.America World

Apr-2013

May-2013

Jul-2013

Aug-2013

% year

Source: IATA

Monthly international air passenger growth

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3

6

9

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15

18

2005 2006 2007 2008 2009 2010 2011 2012 2013

RPK = revenue passenger kms

Source: IATA

3 month moving average

Icelandic Ash Cloud Impact

International air passenger traffic growth% year, RPK

Africa Asia/Pacific Europe LatinAmerica

Mid.East N.America World

0

5

10

15

202011

2012

2013 ytd

% year, RPK

Source: IATA

Annual international air passenger growth



European international airline demand has also improved, according to AEA data, although

growth is uneven with some slowdown in recent weeks. There was a clear acceleration

during the summer but some recent slower growth suggests some caution is still required in

interpreting the recent trend as typical for future growth.

Load factors have continued to edge higher as airlines have remained cautious in adding

capacity, while existing space is apparently being used more efficiently. Improvement is

most notable on intra-European travel, with load factors likely to reach around 75% for

2013. This is up from a typical rate of less than 70% in the years to 2009 prior to the

financial crisis when capacity usage began to edge up; load factors averaged around 72%

between 2010 and 2012.

Long haul travel has exceeded total European airline demand, but the total trend contains

domestic demand which has fallen throughout 2013. European cross-border demand has

seen the largest improvement during the summer and short-haul traffic has overtaken long-

haul demand.

Air travel between Europe and the Americas has grown at 4.1% so far in 2013, with resilient

growth in the most recent weeks and months. Travel between Asia and Europe on

European Airlines has grown by 4.6% in the year to date but has been more volatile and a

slowdown is reflected in the most recent data.

-2

0

2

4

6

8

10

12

14

201

2Q

1

2012Q

2

2012Q

3

2012Q

4

2013Q

1

2013Q

2

2013Q

3

RPK, 4 week moving average, % change year ago


Source: AEA

European airline passenger traffic: Asia

Europe-Asia

Total European Airlines

60

65

70

75

80

85

90

Q1 Q2 Q3 Q4

Weekly load factor, %

Source: AEA

European airlines passenger load factor

20122013

2011

-4

-2

0

2

4

6

8

10

12

2012Q

1

2012Q

2

2012Q

3

2012Q

4

2013Q

1

2013Q

2

2013Q

3

RPK, 4 week moving average, % change year ago


Source: AEA

European airline passenger traffic: Americas

Europe-Americas

Total European Airlines

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5

10

15

20

25

30

Q1 Q2 Q3 Q4

ASK, 4 week moving average, % change year ago

Source: AEA

European airlines capacity

2013

2011

2012

Comment [NK]: And

between 2010-2012?



Asia/Pacific Americas Europe MiddleEast/Africa

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2

4

6 Occ ADR* RevPAR*

Global Hotel Performance, Jan-Aug 2013

% change year ago

Source: STR Global * ADR and RevPAR denominated in US$ except for Europe

Accommodation

Hotel data has indicated a slowing trend for much of 2013 on aggregate, although

there are clear regional differences, supportive of the trends in airline data.

Demand and room rates have fallen in Asia Pacific with notable weakness in

China related to government business travel. Tension between the Republic of

Korea and the Democratic People’s Republic of Korea deterred some visitors to

the region, and notably to those states, while further tension between China and

Japan may also have contributed to the slowdown.

Occupancy growth in the Americas has slowed, with weaker performance in both

North America and Latin America. ADR has improved, primarily in North America

as occupancy remains high with good prospects of a return to growth.

Europe is a clear exception to the demand trend, which is growing after relatively

flat performance last year. Occupancy in European hotels in the first eight months

of the year was 2.4% higher than a year earlier. This is an improvement on the

growth of 1.8% recorded in the first five months of the year and indicates

acceleration in occupancy (and likely in room demand) through the important

summer months.

However, ADR remains lower than a year earlier over the same period. This is

due in part to some concerns regarding the outlook on the part of the hotel

industry and an apparent reluctance to raise rates.

A significant factor in the lower ADR is comparison to some inflated rates due to

last summer’s mega-events. The UEFA Euro 2012 in Poland pushed ADR to

levels 90% higher than the prior year in June 2012. The London Olympics inflated

UK average room rate during August 2012 and ADR rose around 20%. Large

falls are evident in data for corresponding months in 2013 as rates return to more

sustainable levels.



ADR growth for Europe as a whole excluding UK and Poland would be around

1.5% (in euro terms) rather than the 1.8% fall reported for the region. The growth

excluding the two affected countries is arguably a better reflection of underlying

strength. ADR growth for Northern Europe excluding the UK is estimated to be

around 5% in the year to date, while excluding Poland from Eastern Europe would

show a much smaller fall of less than 1%.

It is notable that rates in Southern Europe have risen, and even accelerated during

the summer, while the decline in Western Europe has been minimal despite similar

occupancy trends. This may reflect relative access to credit and ability to operate

with temporary losses rather than underlying strength or confidence.

Occupancy trends are now positive in 20 out of the 25 countries with growth

reported across all sub-regions in the year-to-date. But growth remains subdued in

some large countries and is notably flat in France, which does not report data

through TourMIS. Meanwhile, hotel data for Italy are surprisingly strong given falls

in arrivals, but this may involve an increase in domestic demand, suggested by

outbound data.

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2

4

6

Europe EasternEurope

NorthernEurope

SouthernEurope

WesternEurope

Occ ADR (€) RevPAR (€)

European hotel performance, Jan-Aug 2013

% change year ago

Source: STR Global

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Slo

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Pola

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Port

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Cze

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De

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Malta

Spa

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Ne

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Gre

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Fra

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Austr

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Belg

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Tu

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Esto

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Fin

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d

Hotel occupancy ratesJan-Aug year to date, % change year ago

Source: STR Global



Room rate trends are more positive than earlier in the year, with 16 of the 25

countries reporting higher ADR in the year to date than in 2012, measured in local

currencies.

Rate increases are notable in some Northern countries which have been

performing well on all measures. There is also further large improvement in some

Southern countries.

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Lith

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Po

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Spa

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Fra

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Ita

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Cze

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Belg

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Sw

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Austr

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Pola

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Hotel average daily rate (ADR)Jan-Aug year to date, local currency, % change year ago

Source : STR Global

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Lith

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kia

Port

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Ru

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Ita

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Ma

lta

Esto

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Sw

itze

rla

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Tu

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Spa

in

Gre

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Cze

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Re

pub

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Fra

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Un

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ingd

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Germ

an

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Belg

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Au

str

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Ro

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the

rla

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Fin

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d

Po

lan

d

Hotel revenue per available room (RevPAR)

Jan-Aug year to date, local currency, % change year ago

Source: STR Global

% change year ago Occupancy ADR RevPAR

Austria 0.0 -0.3 -0.3

Belgium -0.1 0.3 0.1

Czech Republic 2.1 1.3 3.5

Denmark 1.9 6.3 8.3

Estonia -2.3 7.4 4.9

Finland -4.6 -1.3 -5.8

France 0.0 2.5 2.5

Germany 0.9 0.2 1.1

Greece 0.8 2.9 3.7

Hungary 4.9 5.6 10.7

Ireland 5.3 4.7 10.3

Italy 4.9 1.9 6.9

Lithuania 5.1 9.5 15.1

Malta 1.4 4.6 6.0

Netherlands 0.8 -3.0 -2.2

Poland 6.6 -16.5 -11.0

Portugal 4.3 3.1 7.5

Romania 0.9 -2.0 -1.2

Russia 4.1 2.9 7.1

Slovakia 10.5 -2.5 7.7

Spain 1.2 2.5 3.8

Switzerland 4.8 -0.2 4.5

Turkey -1.7 6.1 4.3

United Kingdom 4.0 -2.0 1.9

Source: STR Global

Hotel Performance

Year to Date, Jan-Aug 2013

ADR = Average Daily Rate, RevPAR = Revenue per Available Room, ADR

and RevPAR in local currency



Key Source Market Performance

Some continued growth in early 2013

Travel demand for 2013 to date has continued to grow with some

encouraging data for the peak summer months*.

Major Western European source markets continue to show uneven growth

with many destinations still reporting lower arrivals from these markets.

The UK stands out as a top-performing origin market within Western

Europe, with notable improvement during the summer.

Russian travel demand continues to increase in importance for European

destinations, leading other emerging markets.

*Trends discussed in this section are for up to the first 5-8 months of the year. These are

inclusive of at least part of the peak June-September period. Arrivals during this period

acocunt for around half of European international arrivals. Trends shown will not exactly

match final 2013 growth but should be indicative of full year performance in most

instances.

Further detailed monthly data for origin and destination, including absolute values, can be

obtained from TourMIS, http://tourmis.info.

Key intra-European markets

Tourism visits from Germany continue to grow in a majority of destinations but 8 out of

23 destinations are reporting demand falling in the year to date. The mixed

performance is typified by two of the top destinations for German tourists. Spain is

reporting a 4.2% growth in arrivals for the year to August while Italy is reporting a 7.1%

fall in the year to June.

A majority of destinations reporting overnights from Germany still show falls in 2013 to

date. For destinations reporting both metrics, shorter length of stay is still a feature for

most markets as some cost savings are still being sought.

-40

-30

-20

-10

0

10

20

Icela

nd

Slo

vakia

UK

Bulg

aria

Serb

iaP

ola

nd

Malta

Monte

negro

Cro

atia

Spain

Gre

ece

Neth

erlands

Austr

iaG

erm

any

Lithuania

Rom

ania

Belg

ium

Latv

iaH

ungary

Czech R

ep

Slo

venia

Italy

Esto

nia

Cypru

s

Visits from Germany to select destinations



-40

-30

-20

-10

0

10

20

Port

ugal

Malta

Pola

nd

Slo

vakia

Luxem

bourg

Neth

erlands

Cro

atia

Austr

iaS

erb

iaG

erm

any

Sw

eden

Monte

negro

Sw

itzerland

Latv

iaS

pain

Belg

ium

Czech R

ep

Denm

ark

Rom

ania

Hungary

Slo

venia

Lithuania

Fin

land

Esto

nia

Bulg

aria

Norw

ay

Cypru

s

German visitor nights in select destinations





-40

-30

-20

-10

0

10

20

Slo

venia

Italy

Slo

vakia

UK

Malta

Icela

nd

Pola

nd

Rom

ania

Hungary

Cro

atia

Serb

ia

Spain

Germ

any

Austr

ia

Monte

negro

Lithuania

Bulg

aria

Czech R

ep

Belg

ium

Esto

nia

Gre

ece

Visits from Netherlands to select destinations



-40

-30

-20

-10

0

10

20

Slo

venia

Malta

Slo

vakia

Pola

nd

Rom

ania

Hungary

Spain

Port

ugal

Sw

eden

Germ

any

Denm

ark

Cro

atia

Austr

iaS

witzerla

nd

Fin

land

Luxem

bourg

Czech R

ep

Lithuania

Serb

iaB

elg

ium

Norw

ay

Bulg

aria

Monte

negro

Esto

nia

Cypru

s

Netherlands nights in select destinations



-20

-15

-10

-5

0

5

10

15

20

Icela

nd

Cro

atia

Malta

Monte

negro

UK

Pola

nd

Spain

Italy

Hungary

Germ

any

Neth

erlands

Serb

iaB

elg

ium

Latv

iaB

ulg

aria

Slo

vakia

Rom

ania

Austr

iaS

lovenia

Czech R

ep

Esto

nia

Gre

ece

Lithuania

Visits from France to select destinations



-20

-15

-10

-5

0

5

10

15

20

Lithuania

Port

uga

lS

pain

Malta

Latv

iaM

onte

negro

Pola

nd

Bulg

aria

Cro

atia

Luxem

bourg

Belg

ium

Germ

any

Hungary

Slo

venia

Neth

erlands

Fin

land

Sw

itzerlan

dD

enm

ark

Austr

iaN

orw

ay

Serb

iaC

zech R

ep

Sw

eden

Rom

ania

Esto

nia

Slo

vakia

Cypru

s

French visitor nights in select destinations



Netherlands tourism demand remains weak overall with a majority of destinations

still reporting lower arrivals or overnights than a year earlier. Travel to Belgium

has been surprisingly weak in the summer, with arrivals reportedly down 10% in

the year to date.

In a reversal of German trends, Dutch arrivals in Spain are lower than during

2012, while travel to Italy has bucked the wider trend with 15.8% growth in

arrivals. UK arrivals from Netherlands also rose 9.0%.

Recent data relating to French travel demand are more positive than data for earlier

in the year as more destinations are now reporting that French arrivals and

overnights were higher than in 2012.

The UK also reports strong arrivals growth of 7.0%, consistent with UK reporting for

most European origin markets and especially notable in August data following low

visitation in August 2012.

Unusually, Lithuania is reportedly the strongest European market in terms of

French overnights but the weakest in terms of arrivals, indicating a big swing

towards longer length of stay. However, this more likely highlights some uncertainty

in the data for the year to date.



-30

-20

-10

0

10

20

30

Icela

nd

Malta

Slo

vakia

UK

Gre

ece

Hungary

Rom

ania

Neth

erlands

Pola

nd

Bulg

aria

Cro

atia

Germ

any

Slo

venia

Belg

ium

Austr

ia

Czech R

ep

Spain

Esto

nia

Serb

ia

Latv

ia

Monte

negro

Lithuania

Visits from Italy to select destinations



Italian travel to other European countries has remained weak overall, notwithstanding

some robust growth reported by select, and mainly smaller, destinations. There is also

a rebound in travel to the UK, of 9.0% growth.

Overnight trends are weaker than for arrivals indicating some further cost savings being

sought by Italian tourists. Other European destinations may be losing out to some

substitution by Italians towards domestic travel. This could also help explain the 4.9%

rise in hotel occupancy while arrivals in Italy have fallen.

British overseas travel demand has improved significantly as 2013 has progressed

according to UK International Passenger Survey (IPS) carried out by National

Statistics with outbound trips 3% higher than a year earlier in the year to August,

including stronger performance during the summer months. Travel to Europe is up a

reported 4% for the year to date.

This is typified by the reported 4.8% growth in travel to Spain (the top destination for

UK travellers), up from 4.4% in the year to June. Among other important destinations

Ireland and Germany report robust growth of 3.6% and 6.2% while travel to Italy has

fallen by 1.4%. There remains scope for further acceleration in UK travel growth given

improvements in the economic outlook and some likely pent-up demand.

-30

-20

-10

0

10

20

30

Luxem

bourg

Malta

Slo

vakia

Denm

ark

Rom

ania

Neth

erlands

Hungary

Sw

eden

Germ

any

Sw

itzerland

Pola

nd

Cro

atia

Belg

ium

Norw

ay

Port

ugal

Austr

iaS

lovenia

Fin

land

Esto

nia

Bulg

aria

Czech R

ep

Latv

iaS

pain

Cypru

sM

onte

negro

Serb

iaLithuania

Italian visitor nights in select destinations



-40

-30

-20

-10

0

10

20

30

40

Icela

nd

Cro

atia

Hungary

Lithuania

Monte

negro

Slo

vakia

Slo

venia

Serb

iaG

erm

any

Austr

iaB

elg

ium

Malta

Spain

Pola

nd

Irela

nd R

ep

Czech R

ep

Latv

iaN

eth

erlands

Italy

Bulg

aria

Rom

ania

Cypru

sE

sto

nia

Gre

ece

Visits from UK to select destinations



41.1

>

-40

-30

-20

-10

0

10

20

30

40

Lithuania

Cro

atia

Hungary

Monte

negro

Fin

land

Slo

venia

Bulg

aria

Port

uga

lD

enm

ark

Germ

any

Spain

Luxem

bourg

Latv

iaM

alta

Belg

ium

Slo

vakia

Sw

itzerlan

dA

ustr

iaP

ola

nd

Czech R

ep

Serb

iaR

om

ania

Sw

eden

Neth

erlands

Norw

ay

Cypru

sE

sto

nia

British visitor nights in select destinations





Russia is becoming an increasingly important market with further growth reported in

most European destinations. European arrivals from Russia are now believed to have

roughly doubled between 2009 and 2013, taking an increased share of European

demand from 3% to 6% of total European arrivals. Growth is now being shared by

several Western European destinations, having previously been skewed more towards

Eastern destinations.

Russian travel to Greece has been especially strong in 2013 as the fourth consecutive

year of double-digit growth. Travel volumes are now roughly five times larger than in

2009. Russia now comprises almost 9% Greek inbound, up from just 2% in 2009.

-10

0

10

20

30

40

50

60

Gre

ece

Icela

nd

Slo

vakia

Rom

ania

Serb

iaLatv

iaS

pa

inM

onte

negro

Cypru

sLithuania

Hungary

Malta

Neth

erlands

Germ

any

Bulg

aria

Esto

nia

Italy

Slo

venia

Czech R

ep

Austr

iaB

elg

ium

Pola

nd

UK

Cro

atia

Visits from Russia to select destinations



71.2

>

-10

0

10

20

30

40

50

60

Rom

ania

Slo

vakia

Serb

iaC

ypru

sS

pain

Lithuania

Hungary

Latv

iaN

eth

erlands

Monte

negro

Port

ugal

Germ

any

Denm

ark

Esto

nia

Czech R

ep

Malta

Bulg

aria

Norw

ay

Austr

iaLuxem

bourg

Fin

land

Belg

ium

Sw

eden

Sw

itzerland

Pola

nd

Slo

venia

Cro

atia

Russian visitor nights in select destinations





Non-European markets

Long-haul travel demand has continued to grow in the latest reported data, consistent

with airline data. But the pace of growth from some long-haul markets may be slower

than previously estimated for 2013.

Slower travel demand follows some moderate economic growth in major long-haul

origin markets. However, in some emerging markets, such as China, this impact will be

offset by the continued positive impact of rising household incomes. This dynamic is

enabling more households to afford international travel.

US travel demand has apparently slowed during 2013, but is positive overall. Italy

stands out as a large destination that has continued to receive an increasing number of

US arrivals, up 13.5% in 2013 to date. By contrast, travel to the UK has fallen, although

this typifies the long-haul reaction to the 2012 Olympics with stronger arrivals for the

event period leading to some offsetting slower growth this year.

Japanese travel to Europe has picked up during the summer, with more destinations

reporting growth in arrivals. Economic stimulus and stronger growth in the domestic

economy may be having some beneficial impact, although the weaker yen and lower

affordability of international travel remains a challenge for long-haul destinations.

Japanese outbound travel has been stronger to Asian markets than for long-haul

destinations.

-30

-20

-10

0

10

20

30

40

Slo

vakia

Latv

iaIc

ela

nd

Cro

atia

Hungary

Slo

venia

Italy

Pola

nd

Serb

iaA

ustr

iaLithuania

Bulg

aria

Malta

Germ

any

Czech R

ep

Monte

negro

Spain

Rom

ania

UK

Belg

ium

Gre

ece

Esto

nia

Neth

erlands

Visits from US to select destinations



-30

-20

-10

0

10

20

30

40

Latv

iaC

roatia

Port

ugal

Bulg

aria

Hungary

Serb

iaP

ola

nd

Lithuania

Slo

vakia

Luxem

bourg

Malta

Denm

ark

Sw

itzerland

Austr

iaC

ypru

sG

erm

any

Slo

venia

Czech R

ep

Rom

ania

Fin

land

Esto

nia

Sw

eden

Neth

erlands

Belg

ium

Norw

ay

Monte

negro

US visitor nights in select destinations



53

.9 >

-40

-30

-20

-10

0

10

20

30

40

Icela

nd

Esto

nia

Gre

ece

Pola

nd

Italy

Rom

ania

Neth

erlands

Monte

negro

Belg

ium

Austr

ia

Slo

vakia

Hungary

Cro

atia

Germ

any

Bulg

aria

UK

Serb

ia

Lithuania

Czech R

ep

Slo

venia

Visits from Japan to select destinations



-40

-30

-20

-10

0

10

20

30

40

Cypru

sB

ulg

aria

Port

ugal

Fin

land

Pola

nd

Esto

nia

Luxem

bourg

Lithuania

Hungary

Spa

inS

lovakia

Neth

erlands

Austr

iaS

witzerland

Rom

ania

Germ

any

Belg

ium

Cro

atia

Denm

ark

Czech R

ep

Sw

eden

Norw

ay

Serb

iaS

lovenia

Monte

negro

Japanese visitor nights in select destinations





Chinese travel has continued to grow strongly in most European destinations. Growth is

also reported to the UK, although this is towards the lower end of reported rates by

comparison to a strong performance in 2012 likely related to the Olympics.

The rise in incomes and continuing increase in the proportion of Chinese households

able to afford international travel is a clear positive factor for global tourism. For now this

is offsetting the effects of slower economic growth projections (factored into Tourism

Economics tourism model). Slower economic growth is having more of an impact on

business travel within Asia than on longer-haul and leisure travel.

Indian demand for travel to Europe remains weak in the limited data reported for 2013.

For the most popular destinations among Indian tourists, UK and Germany report

growth of 5% and 10% respectively. However, Switzerland reports a 1% drop in arrivals

for the year to date while Italian arrivals are 20% lower than in 2012. This is consistent

with the subdued economic growth within India. An expected return to economic reform

should stimulate the economy within the short to medium term outlook and travel

prospects from India remain positive overall.

-20

-10

0

10

20

30

40

50

Esto

nia

Slo

venia

Cro

atia

Icela

nd

Neth

erlands

Bulg

aria

Rom

ania

Belg

ium

Serb

ia

Czech R

ep

Slo

vakia

Germ

any

Austr

ia

Pola

nd

UK

Gre

ece

Italy

Lithuania

Visits from China to select destinations



-20

-10

0

10

20

30

40

50

Cypru

s

Norw

ay

Esto

nia

Denm

ark

Slo

vakia

Rom

ania

Sw

itzerland

Neth

erlands

Fin

land

Cro

atia

Sw

eden

Austr

ia

Slo

venia

Luxem

bourg

Belg

ium

Czech R

ep

Pola

nd

Germ

any

Serb

ia

Lithuania

Chinese visitor nights in select destinations



238.9

>

64.6

>

-30

-20

-10

0

10

20

30

40

50

60

Slo

vakia

Cro

atia

Germ

any

Bulg

aria

Czech R

ep

UK

Austr

ia

Neth

erlands

Pola

nd

Belg

ium

Italy

Rom

ania

Visits from India to select destinations



90.3

>

-30

-20

-10

0

10

20

30

40

50

60

Slo

vakia

Sw

eden

Pola

nd

Fin

land

Austr

ia

Germ

any

Czech R

ep

Sw

itzerland

Neth

erlands

Belg

ium

Cro

atia

Rom

ania

Indian visitor nights in select destinations





Travel trends from Canada remain uneven and similar to the pattern from the US. A

majority of destinations report falling arrivals and overnights from Canada as economic and

travel demand growth has slowed in 2013 to date. Large European destinations such as

UK, Italy and Germany report continued arrivals growth although there has been little

improvement to note as 2013 has progressed.

-70

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

Icela

nd

Cro

atia

Serb

ia

UK

Italy

Slo

vakia

Slo

venia

Germ

any

Bulg

aria

Monte

negro

Austr

ia

Neth

erlands

Belg

ium

Czech R

ep

Pola

nd

Rom

ania

Gre

ece

Lithuania

Visits from Canada to select destinations



-70

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

Norw

ay

Serb

ia

Cro

atia

Port

ugal

Denm

ark

Germ

any

Sw

eden

Slo

venia

Neth

erlands

Sw

itzerland

Austr

ia

Slo

vakia

Monte

negro

Belg

ium

Pola

nd

Czech R

ep

Fin

land

Rom

ania

Lithuania

Cypru

s

Canadian visitor nights in select destinations





United States

Origin Market Share Analysis

Based on the Tourism Decision Metrics (TDM) model, the following charts and analysis show Europe’s

evolving market position - in absolute and percentage terms - for selected source markets. 2012 values

remain preliminary estimates and are not final reported data.

84.7 million tourists traveled from the US in 2013. Of

these, 31.4 million traveled within North America, while

53.4 million (63.0%) traveled to long haul destinations.

US tourist arrivals to Europe in 2013 totaled 23.4 million,

representing 43.8% of the US long haul outbound market.

US tourist arrivals to Northern Europe in 2013 totaled 5.1

million, representing 22.0% of US arrivals to Europe.

US tourist arrivals to Western Europe in 2013 totaled 9.1


US tourist arrivals to Southern Europe in 2013 totaled 5.9


US tourist arrivals to Central/Eastern Europe in 2013

totaled 3.2 million, representing 13.8% of US arrivals to

Europe.

Northern Europe's share of the US market was 9.6% in

2013, a 4.9 percentage point decrease from 2003.

Western Europe's share of the US market was 17.1% in


Southern Europe's share of the US market was 12.2% in

2013, a 2.3 percentage point increase from 2003.

Central/Eastern Europe's share of the US market was

8.3% in 2013, a 0.7 percentage point increase from 2003.

Long haul outbound from the US is forecast to grow 5.4%

per year on average to 2018

Arrivals to Northern Europe are expected to increase

33.9% through 2018, to 6.9 million. Northern Europe's

share of the US market is forecast to rise to 9.9% in 2018

Arrivals to Western Europe are expected to increase

19.5% through 2018, to 10.9 million. Western Europe's

share of the US market is forecast to fall to 15.7% 2018

Arrivals to Southern Europe are expected to increase

16.2% through 2018, to 6.9 million. Southern Europe's

share of the US market is forecast to fall to 11.0% 2018

Arrivals to Central/Eastern Europe are expected to

increase 32.6% through 2018, to 4.3 million.

Central/Eastern Europe's share of the US market is

forecast to rise to 8.3% 2018

0

10

20

30

40

50

60

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

US long haul* outbound travel Rest of Long Haul

Central/Eastern Europe

Southern Europe

Western Europe

Northern Europe

Million

*Long haul defined as tourist arrivals to destinations outside North America

Source: Tourism Economics

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

20

03

20

04

20

05

20

06

20

07

20

08

20

09

201

0

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Europe's share of US marketNorthern Europe

Western Europe

Southern Europe


% of long haul* market



Note: this analysis is based on the Tourism Decision Metrics

(TDM) model. The geographies of Europe are defined as:

Northern Europe: Denmark, Finland, Iceland, Ireland,

Norway, Sweden, UK

Western Europe: Austria, Belgium, France, Germany,

Luxembourg, Netherlands, Switzerland

Southern/Mediterranean Europe: Albania, Bosnia-

Herzogovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy,

Malta, Montenegro, Portugal, Serbia, Slovenia, Spain, Turkey

Central/Eastern Europe: Armenia, Azerbaijan, Bulgaria,

Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan,

Latvia, Lithuania, Poland, Romania, Russian Federation,

Slovakia, Ukraine



Canada

35.9 million tourists traveled from Canada in 2013. Of these,

24.6 million traveled within North America, while 11.3 million

(31.5%) traveled to long haul destinations.

Canadian tourist arrivals to Europe in 2013 totaled 4.5 million,

representing 40.2% of the Canadian long haul outbound

market.

Canadian tourist arrivals to Northern Europe in 2013 totaled

1.1 million, representing 24.7% of Canadian arrivals to

Europe.

Canadian tourist arrivals to Western Europe in 2013 totaled


Europe.

Canadian tourist arrivals to Southern Europe in 2013 totaled


Europe.

Canadian tourist arrivals to Central/Eastern Europe in 2013

totaled 0.3 million, representing 7.5% of Canadian arrivals to

Europe.

Northern Europe's share of the Canadian market was 9.9% in


Western Europe's share of the Canadian market was 14.5%

in 2013, a 2.9 percentage point decrease from 2003.

Southern Europe's share of the Canadian market was 14.1%

in 2013, a 2.5 percentage point increase from 2003.

Central/Eastern Europe's share of the Canadian market was


Long haul outbound from Canada is forecast to grow 3.4%

per year on average to 2018.

Arrivals to Northern Europe are expected to increase 19.2%

through 2018, to 1.3 million. Northern Europe's share of the

Canadian market is forecast to rise to 10.0% in 2018.

Arrivals to Western Europe are expected to increase 5.2%

through 2018, to 1.7 million. Western Europe's share of the

Canadian market is forecast to fall to 12.9% in 2018.

Arrivals to Southern Europe are expected to increase 6.3%

through 2018, to 1.5 million. Southern Europe's share of the

Canadian market is forecast to fall to 12.7% in 2018.

Arrivals to Central/Eastern Europe are expected to increase

19.5% through 2018, to .4 million. Central/Eastern Europe's

share of the Canadian market is forecast to fall to 4.0% in

2018.

0

2

4

6

8

10

12

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Canada long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million



0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Canadian marketNorthern Europe

Western Europe

Southern Europe







Mexico

17.1 million tourists traveled from Mexico in 2013. Of these,

14.9 million traveled within North America, while 2.2 million


Mexican tourist arrivals to Europe in 2013 totaled 1.2 million,

representing 55.7% of the Mexican long haul outbound

market.

Mexican tourist arrivals to Northern Europe in 2013 totaled

116,000, representing 9.3% of Mexican arrivals to Europe.

Mexican tourist arrivals to Western Europe in 2013 totaled


Mexican tourist arrivals to Southern Europe in 2013 totaled


Mexican tourist arrivals to Central/Eastern Europe in 2013

totaled 112,000, representing 9.0% of Mexican arrivals to

Europe.

Northern Europe's share of the Mexican market was 5.2% in


Western Europe's share of the Mexican market was 28.8% in


Southern Europe's share of the Mexican market was 17.6% in


Central/Eastern Europe's share of the Mexican market was


Long haul outbound from Mexico is forecast to grow 5.9% per

year on average to 2018.


through 2018, to 166,000. Northern Europe's share of the

Mexican market is forecast to rise to 5.6% in 2018.


through 2018, to 726,000. Western Europe's share of the

Mexican market is forecast to fall to 24.5% in 2018.


through 2018, to 412,000. Southern Europe's share of the

Mexican market is forecast to fall to 14.7% in 2018.


41.8% through 2018, to 158,000. Central/Eastern Europe's

share of the Mexican market is forecast to rise to 7.6% in

2018.

0.0

0.5

1.0

1.5

2.0

2.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mexico long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million



0%

5%

10%

15%

20%

25%

30%

35%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

201

1

2012

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Mexican marketNorthern Europe

Western Europe

Southern Europe







Argentina

7.4 million tourists traveled from Argentina in 2013. Of

these, 5.2 million traveled within South America, while 2.2

million (30.3%) traveled to long haul destinations.

Argentinian tourist arrivals to Europe in 2013 totaled 0.8

million, representing 36.8% of the Argentinian long haul

outbound market.

Argentinian tourist arrivals to Northern Europe in 2013

totaled 130,000, representing 15.8% of Argentinian arrivals

to Europe.

Argentinian tourist arrivals to Western Europe in 2013

totaled 46,000, representing 5.6% of Argentinian arrivals to

Europe.

Argentinian tourist arrivals to Southern Europe in 2013

totaled 557,000, representing 67.6% of Argentinian arrivals

to Europe.

Argentinian tourist arrivals to Central/Eastern Europe in

2013 totaled 91,000, representing 11.0% of Argentinian

arrivals to Europe.

Northern Europe's share of the Argentinian market was


Western Europe's share of the Argentinian market was

2.1% in 2013, a 1.1 percentage point decrease from 2003.

Southern Europe's share of the Argentinian market was

26.4% in 2013, a 15.9 percentage point decrease from

2003.

Central/Eastern Europe's share of the Argentinian market

was 4.4% in 2013, a 2.2 percentage point decrease from

2003.

Long haul outbound from Argentina is forecast to grow

5.8% per year on average to 2018.


53.7% through 2018, to 201,000. Northern Europe's share

of the Argentinian market is forecast to rise to 6.7% in

2018.


48.1% through 2018, to 68,000. Western Europe's share


2018.


34.9% through 2018, to 752,000. Southern Europe's share


2018.


increase 66.3% through 2018, to 151,000. Central/Eastern

Europe's share of the Argentinian market is forecast to rise

to 5.6% in 2018.

0.0

0.5

1.0

1.5

2.0

2.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Argentina long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million

*Long haul defined as tourist arrivals to destinations outside South America


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

201

1

2012

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Argentinean market

Northern Europe

Western Europe

Southern Europe







Brazil

9.4 million tourists traveled from Brazil in 2013. Of these,

2.7 million traveled within South America, while 6.8 million


Brazilian tourist arrivals to Europe in 2013 totaled 3.5

million, representing 51.4% of the Brazilian long haul

outbound market.

Brazilian tourist arrivals to Northern Europe in 2013 totaled

285,000, representing 8.2% of Brazilian arrivals to Europe.

Brazilian tourist arrivals to Western Europe in 2013 totaled

1,596,000, representing 46.0% of Brazilian arrivals to

Europe.

Brazilian tourist arrivals to Southern Europe in 2013 totaled

1,278,000, representing 36.8% of Brazilian arrivals to

Europe.

Brazilian tourist arrivals to Central/Eastern Europe in 2013

totaled 313,000, representing 9.0% of Brazilian arrivals to

Europe.

Northern Europe's share of the Brazilian market was 4.2%


Western Europe's share of the Brazilian market was 23.6%


Southern Europe's share of the Brazilian market was


Central/Eastern Europe's share of the Brazilian market was


Long haul outbound from Brazil is forecast to grow 7.7%



56.1% through 2018, to 444,000. Northern Europe's share

of the Brazilian market is forecast to rise to 4.5% in 2018.


through 2018, to 1,860,000. Western Europe's share of the

Brazilian market is forecast to fall to 19.0% in 2018.


through 2018, to 1,285,000. Southern Europe's share of the

Brazilian market is forecast to fall to 13.7% in 2018.


increase 39.8% through 2018, to 437,000. Central/Eastern

Europe's share of the Brazilian market is forecast to fall to

5.8% in 2018.

0

1

2

3

4

5

6

7

8

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Brazil long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million



0%

5%

10%

15%

20%

25%

30%

35%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

201

1

2012

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Brazilian marketNorthern Europe

Western Europe

Southern Europe







India

11.3 million tourists traveled from India in 2013. Of these,

0.5 million traveled within South Asia, while 10.7 million


Indian tourist arrivals to Europe in 2013 totaled 1.5

million, representing 14.4% of the Indian long haul

outbound market.

Indian tourist arrivals to Northern Europe in 2013 totaled

341,000, representing 22.0% of Indian arrivals to Europe.

Indian tourist arrivals to Western Europe in 2013 totaled


Indian tourist arrivals to Southern Europe in 2013 totaled


Indian tourist arrivals to Central/Eastern Europe in 2013

totaled 347,000, representing 22.4% of Indian arrivals to

Europe.

Northern Europe's share of the Indian market was 3.2%


Western Europe's share of the Indian market was 5.6% in


Southern Europe's share of the Indian market was 2.5%


Central/Eastern Europe's share of the Indian market was


2003.

Long haul outbound from India is forecast to grow 9.6%



28.5% through 2018, to 439,000. Northern Europe's

share of the Indian market is forecast to fall to 2.6% in

2018.


69.7% through 2018, to 1,021,000. Western Europe's

share of the Indian market is forecast to rise to 6.0% in

2018.


62.2% through 2018, to 421,000. Southern Europe's

share of the Indian market is forecast to rise to 2.6% in

2018.


increase 83.5% through 2018, to 636,000.

Central/Eastern Europe's share of the Indian market is

forecast to rise to 4.1% in 2018.

0

2

4

6

8

10

12

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

India long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million

*Long haul defined as tourist arrivals to destinations outside South Asia


0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

201

1

2012

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Indian marketNorthern Europe

Western Europe

Southern Europe



*Long haul defined as tourist arrivals to destinations outside South Asia




China

56.7 million tourists traveled from China in 2013. Of these,

33.1 million traveled within Northeast Asia, while 23.7 million


Chinese tourist arrivals to Europe in 2013 totaled 8.0 million,

representing 33.8% of the Chinese long haul outbound

market.

Chinese tourist arrivals to Northern Europe in 2013 totaled

599,000, representing 7.5% of Chinese arrivals to Europe.

Chinese tourist arrivals to Western Europe in 2013 totaled

4,213,000, representing 52.8% of Chinese arrivals to Europe.

Chinese tourist arrivals to Southern Europe in 2013 totaled

578,000, representing 7.2% of Chinese arrivals to Europe.

Chinese tourist arrivals to Central/Eastern Europe in 2013

totaled 2,596,000, representing 32.5% of Chinese arrivals to

Europe.

Northern Europe's share of the Chinese market was 2.5% in


Western Europe's share of the Chinese market was 17.8% in


Southern Europe's share of the Chinese market was 2.5% in


Central/Eastern Europe's share of the Chinese market was


Long haul outbound from China is forecast to grow 10.0% per



through 2018, to 1,146,000. Northern Europe's share of the

Chinese market is forecast to rise to 3.0% in 2018.








68.3% through 2018, to 4,369,000. Central/Eastern Europe's

share of the Chinese market is forecast to rise to 14.7% in

2018.

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

China long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million

*Long haul defined as tourist arrivals to destinations outside Northeast Asia


0%

5%

10%

15%

20%

25%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

201

1

2012

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Chinese marketNorthern Europe

Western Europe

Southern Europe







Japan

24.3 million tourists traveled from Japan in 2013. Of these, 9.4

million traveled within Northeast Asia, while 15.0 million


Japanese tourist arrivals to Europe in 2013 totaled 4.8 million,

representing 32.0% of the Japanese long haul outbound

market.

Japanese tourist arrivals to Northern Europe in 2013 totaled

519,000, representing 10.8% of Japanese arrivals to Europe.

Japanese tourist arrivals to Western Europe in 2013 totaled

2,326,000, representing 48.6% of Japanese arrivals to

Europe.

Japanese tourist arrivals to Southern Europe in 2013 totaled

1,246,000, representing 26.0% of Japanese arrivals to

Europe.

Japanese tourist arrivals to Central/Eastern Europe in 2013

totaled 694,000, representing 14.5% of Japanese arrivals to

Europe.

Northern Europe's share of the Japanese market was 3.5% in


Western Europe's share of the Japanese market was 15.6%


Southern Europe's share of the Japanese market was 8.6% in


Central/Eastern Europe's share of the Japanese market was


Long haul outbound from Japan is forecast to grow 3.0% per




Japanese market is forecast to rise to 3.2% in 2018.








17.3% through 2018, to 814,000. Central/Eastern Europe's

share of the Japanese market is forecast to rise to 5.7% in

2018.

0

2

4

6

8

10

12

14

16

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Japan long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million



0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Europe's share of Japanese marketNorthern Europe

Western Europe

Southern Europe







United Arab Emirates

3.3 million tourists traveled from the UAE in 2013. Of these, 2.0

million traveled within the Middle East, while 1.3 million (38.8%)

traveled to long haul destinations.

Emirati tourist arrivals to Europe in 2013 totaled 0.7 million,

representing 55.9% of the Emirati long haul outbound market.

Emirati tourist arrivals to Northern Europe in 2013 totaled

259,000, representing 35.8% of Emirati arrivals to Europe.

Emirati tourist arrivals to Western Europe in 2013 totaled


Emirati tourist arrivals to Southern Europe in 2013 totaled


Emirati tourist arrivals to Central/Eastern Europe in 2013 totaled


Northern Europe's share of the Emirati market was 20.0% in


Western Europe's share of the Emirati market was 24.4% in


Southern Europe's share of the Emirati market was 13.1% in


Central/Eastern Europe's share of the Emirati market was 2.0%


Long haul outbound from the UAE is forecast to grow 1.8% per


Arrivals to Northern Europe are expected to decrease -2.8%


Emirati market is forecast to rise to 17.8% in 2018.

Arrivals to Western Europe are expected to decrease -7.3%

through 2018, to 292,000. Western Europe's share of the



through 2018, to 159,000. Southern Europe's share of the



23.5% through 2018, to 18,000. Central/Eastern Europe's share

of the Emirati market is forecast to rise to 2.0% in 2018.

0.0

0.5

1.0

1.5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

UAE long haul* outbound travel Rest of Long Haul


Southern Europe

Western Europe

Northern Europe

Million

*Long haul defined as tourist arrivals to destinations outside the Middle East


0%

5%

10%

15%

20%

25%

30%

35%

200

3

200

4

200

5

200

6

200

7

200

8

200

9

2010

201

1

2012

201

3

201

4

201

5

201

6

201

7

201

8

Europe's share of Emirati marketNorthern Europe

Western Europe

Southern Europe



*Long haul defined as tourist arrivals to destinations outside the Middle East




Russia

41.1 million tourists traveled from Russia in 2013. Of these,

31.6 million (77.0%) traveled within Europe, while 9.4 million

traveled to destinations outside Europe.

Russian tourist arrivals to Northern Europe in 2013 totaled

1.8 million, representing 5.6% of Russian arrivals to Europe.

Russian tourist arrivals to Western Europe in 2013 totaled

2.4 million, representing 7.7% of Russian arrivals to Europe.

Russian tourist arrivals to Southern Europe in 2013 totaled

8.6 million, representing 27.1% of Russian arrivals to

Europe.

Russian tourist arrivals to Central/Eastern Europe in 2013

totaled 18.8 million, representing 59.6% of Russian arrivals

to Europe.

Northern Europe's share of the Russian market was 4.3% in


Western Europe's share of the Russian market was 6.0% in


Southern Europe's share of the Russian market was 21.8%


Central/Eastern Europe's share of the Russian market was


2003.

International outbound travel from Russia is forecast to grow

6.8% per year on average to 2018.


through 2018, to 2.2 million. Northern Europe's share of the

Russian market is forecast to fall to 3.9% in 2018.


through 2018, to 3.1 million. Western Europe's share of the

Russian market is forecast to fall to 5.5% in 2018.


through 2018, to 12.9 million. Southern Europe's share of

the Russian market is forecast to rise to 23.5% in 2018.


27.5% through 2018, to 24.0 million. Central/Eastern

Europe's share of the Russian market is forecast to fall to

46.4% in 2018.

0

5

10

15

20

25

30

35

40

45

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Russia outbound travel Rest of World


Southern Europe

Western Europe

Northern Europe

Million

*Outbound travel defined as tourist arrivals to all destinations


0%

10%

20%

30%

40%

50%

60%

70%

200

3

2004

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

2013

201

4

201

5

201

6

201

7

201

8

Europe's share of Russian marketNorthern Europe

Western Europe

Southern Europe


% of outbound* market

*Outbound market defined as tourist arrivals to all destinations




Global Economy: 2013 outlook is brighter than 2012 as risks recede

Near-term US growth prospects have been damaged

by the two-week government shutdown and dispute

over raising the debt ceiling in the first half of October.

We estimate that Q4 US GDP growth (on an

annualised basis) will have been cut by up to 0.5%

points. We now forecast economic growth of 1.6% for

the US in 2013 and 2.9% next year.

Although a deal has now been struck to end the

shutdown and raise the debt ceiling, it is only temporary

and risks related to the US fiscal situation could

resurface next spring. The worst-case scenario could

involve the US needing to make very sharp expenditure

cuts, damaging the recovery.

Aside from the recent events in the US, the broad

pattern over recent months has been for generally

encouraging growth indications from the major

advanced economies, but disappointment from the

emerging economies.

US data releases before the government shutdown

were mixed, but key survey indicators such as the

Institute of Supply Managers (ISM) surveys were

buoyant suggesting accelerating growth into 2014.

Meanwhile, Japan and the UK have posted impressive

growth performances in recent months resulting in

significant upgrades to our growth forecasts for both

countries. UK growth is now expected to reach 2.2%

next year while Japan expands 1.9% this year and

1.6% next.

Eurozone indicators have also continued to point to

gradual improvement, although growth performance

there remains patchy and significant challenges remain

that will restrain growth to 1% in 2014.

By contrast, the performance of key emerging markets

has been disappointing and our GDP forecasts for

China, India and Brazil have all been downgraded

significantly. China is now seen growing 7.4% this year

and 7.1% next (from 8.2% and 8.5% six months ago),

India at 4.1% this year and 4.5% next (from 5.2% and

7.2%) and Brazil at 2.6% this year and 1.9% next (from

2.9% and 4.4%).

Moreover, downside risks to growth remain in the

emerging countries. In particular, some countries have

been forced to raise interest rates to curb inflationary

pressures caused by rapidly falling currencies, even

though economic growth has been slowing. Recent

Chinese data, however, has been more encouraging.

25

30

35

40

45

50

55

60

65

2005 2006 2007 2008 2009 2010 2011 2012 2013

G3: Manufacturing Purchasing Managers' IndexIndex

Source : PMI/Markit

EurozoneUS

Japan

Values above 50 indicate expansion in activity; values below 50 indicate contraction

-15

-10

-5

0

5

10

15

20

25

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

UKUS

EurozoneJapan

World: Corporate holdings of broad money% year

Source : Oxford Economics/Haver Analytics



2012 2013 2014 2015 2016 2017Real GDP

North America

United States 2.8 1.6 2.9 3.2 3.1 3.1 Canada 1.7 1.6 2.0 2.8 2.9 2.7

Europe

Eurozone -0.6 -0.3 0.9 1.4 1.6 1.7 Germany 0.9 0.6 1.6 1.7 1.7 1.7 France 0.0 0.3 0.9 1.1 1.3 1.4 Italy -2.4 -1.9 0.1 1.2 1.5 1.4 UK 0.1 1.4 2.2 2.4 2.7 2.8 EU27 -0.3 -0.1 1.3 1.7 1.9 2.0

Asia

Japan 2.0 1.9 1.6 1.3 0.8 1.1 China 7.7 7.4 7.1 7.3 7.5 7.4 India 5.1 4.1 4.5 5.9 6.3 6.6

G7 1.7 1.2 2.2 2.4 2.3 2.4 World 2.4 2.1 2.9 3.2 3.3 3.4 World 2005 PPPs 3.1 2.8 3.5 4.0 4.1 4.1 World trade 2.3 2.5 5.1 6.1 6.1 6.0Inflation (CPI)

North America United States 2.1 1.5 2.1 2.2 2.1 2.1 Canada 1.5 1.0 1.6 2.1 2.2 2.2

Europe

Eurozone 2.5 1.5 1.5 1.4 1.4 1.5 Germany 2.0 1.6 1.7 1.7 1.7 1.7 France 2.0 1.0 1.5 1.4 1.6 1.6 Italy 3.0 1.5 1.7 1.2 1.2 1.3 UK 2.8 2.6 2.0 1.8 1.7 1.8 EU27 2.6 1.7 1.7 1.6 1.6 1.7 Asia Japan 0.0 0.3 2.0 1.3 1.4 0.7 Emerging Asia, excl Japan 4.8 5.0 5.3 5.2 4.7 4.4 China 2.6 2.5 2.9 2.9 3.0 3.0 India 9.3 10.7 9.0 8.1 7.3 6.6

World 3.6 3.3 2.5 2.3 2.2 2.0Exchange Rates

US$ Effective 73.48 75.96 79.18 83.09 83.76 83.44 $/€ 1.29 1.32 1.27 1.20 1.18 1.18 ¥/$ 79.81 96.83 103.00 112.50 113.13 111.03Commodity Prices

Brent Oil ($/bl) 111.7 107.8 102.6 105.0 107.8 111.5

Summary of International Forecasts



Eurozone Economy

The Eurozone’s resilience was tested again this month with another episode of political

turmoil in Italy. But the region withstood the shock with only brief and very limited

movements in financial markets. Eurozone financial markets have also proved resilient

to concerns about the outcome of the budget negotiations in the US.

This stability confirms the general trend since the beginning of the year when the

Eurozone has seemed able to withstand domestic or external shocks much better than

in 2011 and 2012. This suggests that the economic recovery is well established and that

the ECB remains highly credible as rescuer of last resort.

The data continue to be mixed with ongoing improvement in surveys but output data

pointing to very low growth in Q3. Our forecast is unchanged from last month. We

expect a 0.3% contraction in GDP growth in 2013 as a whole, followed by 1% growth in

2014. This is in line with the just-published forecast by the IMF.

One main source of downside risk relates to uncertainty about available ahead and in

the aftermath of the ECB’s Asset Quality Review The ECB stands ready to offer another

wave of long-term liquidity (LTRO) but it is not clear whether this would be enough to

avoid a credit squeeze.

One source of upside risk relates to the labour market. Unemployment has stabilised in

recent months. We expect some small renewed increases but this could prove too

pessimistic.

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2010 2012 2014 2016 2018 2020 2022

Eurozone GDP growth% year

Source : Oxford Economics

Forecast

1997-2007 average



UK Economy

After another strong set of data in September, it looks very likely that GDP growth

accelerated once more in 2013 Q3. Historic relationships between the monthly data and

the national accounts point to quarterly GDP growth in the region of 0.8%, which would

be the strongest for three years.

The housing market has been a key factor in the recovery, with both activity and prices

continuing to rebound strongly. It appears that house builders have responded by

ramping up activity, with the housing element of the construction PMI reaching a ten-year

high in September. If this expansion in supply continues then it should keep a lid on

prices and stop a bubble from forming. But if the supply response falters, prices could

quickly spiral upwards. In this context the Government’s decision to bring forward the

launch of the mortgage guarantee element of its Help to Buy scheme looks ill-judged.

There have been encouraging signs that the recovery is starting to broaden out from

housing and the consumer to include companies and exports. Surveys of corporate

sentiment have shown a strong pickup in confidence about profitability and investment

intentions, suggesting that business investment should rebound firmly. Meanwhile the

CBI’s manufacturing survey for September reported its strongest balance for export order

books for two-and-a-half years, reflecting stronger activity in the advanced economies,

including Europe.

25

30

35

40

45

50

55

60

65

2005 2006 2007 2008 2009 2010 2011 2012 2013

UK: Purchasing managers surveys% balance*

Source : CIPS/Markit

Construction

activity

Manufacturing

activity

Services business

activity

*value over 50 indicates

rising activity



US Economy

Congress inaction is once again affecting the US economy. The US government “shut

down” for a little over two weeks starting midnight on September 30, forcing 800,000

“non-essential” federal government workers into furlough (although 350,000

Department of Defense civilian workers returned to work after about a week).

Although a deal has now been struck to end the shutdown and raise the debt ceiling, it

is only temporary and risks related to the US fiscal situation could resurface next

spring. The worst-case scenario could involve the US needing to make very sharp

expenditure cuts, damaging the recovery; stock prices would plunge, and private

sector confidence would collapse.

We estimate that Q4 US GDP growth (on an annualised basis) will have been cut by

up to 0.5% points as a result of the shutdown. We now forecast economic growth of

1.6% for the US in 2013 and 2.9% next year.

US data releases before the government shutdown were mixed, but key survey

indicators such as the ISM surveys were buoyant suggesting accelerating growth into

2014.

-10

-8

-6

-4

-2

0

2

4

6

8

2002 2004 2006 2008 2010 2012 2014 2016

% quarter annualised

Forecast

Source: Oxford Economics

GDP growth



Japanese Economy

Japanese growth indicators remain generally upbeat. Although consumer

spending growth appears to have slowed during Q3, industry continues to be

stimulated by the weaker yen and some upturn in regional demand.

Progress in ending deflation is also being made, with the CPI ex-food and energy

unchanged on the year in August – the strongest reading since November 2008.

The relative strength of the economy has encouraged the authorities to press

ahead with the consumption tax increases planned for Q2 2014 and Q4 2015.

These increases constitute a potentially substantial tightening of fiscal policy, and

have therefore been seen as a risky move by many observers. The planned tax

rises will, other things equal, reduce real household income by around 2%.

However, the authorities are now talking of a temporary fiscal stimulus being

introduced next year to soften the impact of the tax rises on growth.

In addition, monetary policy will continue to very accommodative next year, with

the Bank of Japan balance sheet set to expand by over 10% of GDP. As a result,

we have slightly upgraded our economic growth forecasts; for 2013 GDP is still

expected to rise by 1.9%, but GDP growth is now forecast at 1.6% for 2014, up

from 1.3%.

20

25

30

35

40

45

50

55

60

2007 2008 2009 2010 2011 2012 2013

Japan: PMIs

PMI index

Source : Markit

Services

Manufacturing

Values above 50 indicate expansion in activity; values below 50 indicate contraction



Emerging Market Economies

Evidence so far available for Q3 suggests some pickup in

Chinese activity in August. Industrial output growth was

firmer at 10.4% on the year and retail sales were robust – up

13.4%. The manufacturing PMIs continued to improve in

September, with the official measure reaching 51.2 and the

services PMI running at 55.4. Our GDP growth forecast for

2013 has been raised to 7.4% (from 7.2%) for 2013, close to

the government target of 7.5%.

We continue to expect 7.1% growth in 2014. In the longer

term, slower credit growth will hold back activity as the pace

of domestic demand reduces. The Chinese authorities have

taken steps to slow lending growth, particularly from non-

banks, as appear willing to accept slower GDP growth as the

price for successfully tackling the credit bubble and

rebalancing the economy away from investment and towards

consumption-driven growth.

Indian financial markets have stabilised somewhat over the

past month. Emergency measures introduced to help support

a plummeting currency are now being eased back as the

rupee has recovered from its lows in August. The new central

bank governor raised the policy interest rate by 25bp to 7.5%

last month, almost immediately after taking office. He

signalled his intention to address India’s persistent inflation

problem, and we expect a further 25bp rise before the end of

the year.

India’s PMI surveys remained weak in September, pointing to

subdued economic conditions. The manufacturing PMI (49.6)

continued to imply contraction while the services PMI

slumped to 44.6 from 47.6, the lowest since 2009. We now

expect growth of 4.5% in 2014, down from 5.7%, as tight

monetary policy will hit activity.

Elsewhere in Asia there has been little change over the past

month. Our GDP growth forecasts across the region have

come down significantly this year and are now quite cautious

– the most recent data have been in line with our

expectations. Domestic economies are generally still

subdued, but there are some indications that exports and

manufacturing activity may be starting to pick up.

0

3

6

9

12

15

18

21

1995 1998 2001 2004 2007 2010 2013 2016

% year

GDP

Industrial production,

manufacturing, value added


F'cast

China: GDP and industrial production

40

45

50

55

60

65

2005 2006 2007 2008 2009 2010 2011 2012 2013

50 = expansion/contraction breakeven point

Source: Markit

China and India: HSBC Manufacturing PMI

China

India

-3

0

3

6

9

12

15

18

2001 2003 2005 2007 2009 2011 2013

%

Source: Haver Analytics

India: Interest rates & inflation

Repo rate

CPI

Total WPI



Manufacturing PMIs for September were an improvement

almost across the board on August’s data, and most – with the

notable exceptions of South Korea and India – indicate

expansion. Monthly export data for South Korea are volatile but

the underlying trend is still flat. Employment data have been

improving in recent months, however, an indication that the

services sector at least may be beginning to revive.

In Indonesia the authorities are concerned about the effects of

rising prices on domestic demand. Interest rates were

increased in September to 7.25% in an attempt to address high

inflation, which reached 8.4% in September. Worryingly, real

retail sales growth slipped to 1.1% on the year in August and

consumer confidence also dropped – both reactions to the

sharp rise in fuel prices in July. Our GDP forecasts have been

trimmed to 5.6% for 2013 (from 5.7% last month) and 5.4% for

2014 (from 5.5%).

The September manufacturing PMI for Brazil rose to 49.9, but

the increase was modest and still suggests contracting output.

Retail sales volumes for July rose by 0.6% on the month and

consumer confidence improved in September, but remains

below the levels at the start of the year. Our GDP forecasts this

month are unchanged at 2.6% for 2013 and 1.9% for 2014.

Mexican trade data suggested some upturn in external demand

in August with goods exports up 6% on the year, but further

progress will depend on an early political resolution in the US,

its main export market. Domestic demand (including consumer

spending) was weak in Q2, however, prompting the central

bank to cut interest rates in September to 3.75%. Our GDP

forecast for 2013 has been lowered to 1.2% (from 1.4%),

picking up to 3.9% next year.

Growth indicators in Russia have shown few signs of

improvement in the past month. Industrial production stagnated

in July and August, and the manufacturing PMI for September

remained in the doldrums at 49.4. Consumer trends are

healthier, with retail sales volumes up 3.9% in August, but we

have downgraded our GDP forecasts again and now expect

1.5% growth in 2013 (1.7% last month) and 2.8% in 2014 (from

2.9%). In Poland, by contrast, there are signs of recovery with

the PMI rising to 53.1, exports up 12% y/y in July and

recovering industrial production.

80

85

90

95

100

105

110

Jan Feb Mar Apr May Jun Jul Aug Sep

Index (Dec 31, 2012)

, 2012 = 100)

China


BRICs: Exchange rates v US$

Brazil

Russia

India

-8

-6

-4

-2

0

2

4

6

8

10

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016


% year

Mexico

Brazil

Americas: GDP growth

US

Forecast

-30

-20

-10

0

10

20

30

1997 1999 2001 2003 2005 2007 2009 2011 2013

% year


Central & Eastern Europe: Industrial output

3 month moving average

Poland

Russia



Glossary of commonly used terms and abbreviations

Airline industry indicators

ASK Available Seat Kilometers. Indicator of airline supply, available seats x kilometers flown

PLF Passenger Load Factor. Indicator of airline capacity. Equal to revenue passenger kilometers

(RPK) / available seat kilometers (ASK)

RPK Revenue Passenger Kilometers. Indicator of airline demand, paying passenger x kilometers

flown

Hotel industry indicators

ADR Average Daily Rate. Indicator of hotel room pricing. Equal to hotel room revenue / rooms sold in a

given period.

Occ Occupancy Rate. Indicator of hotel performance. Equal to the number of hotel rooms sold /

room supply.

RevPAR Revenue per Available Room. Indicator of hotel performance. Equal to hotel room revenue /

rooms available in a given period

Central Banks

BoE Bank of England; MPC Monetary Policy Committee of BoE

BoJ Bank of Japan

ECB European Central Bank

Fed Federal Reserve (US)

RBI Reserve Bank of India

Economic indicators and terms

Broad money: key indicator of money supply and liquidity including currency holdings as well as bank

deposits that can easily be converted to cash

CPI Consumer Price Index. Measure of price inflation for consumer goods

GDP Gross Domestic Product. The value of goods and services produced in a given economy

LCU Local Currency Unit. The national unit of currency of a given country, e.g. pound, euro, etc.

PMI Purchasing Managers’ Index. Indicator of producers’ sentiment and the direction of the economy

PPI Purchase Price Index. Measure of inflation of input prices to producers of goods and services

PPP Purchasing Power Parity. An implicit exchange rate which equalises the price of identical goods

and services in different countries so they can be expressed with a common price.

QE Quantitive Easing. Expansionary monetary policy pursued by Central Banks involving asset

purchases to reduce bond yields and increase liquidity in capital markets.

G7 Group of seven industrialised countries comprising US, UK, France, Germany, Italy, Canada, Japan



ETC Member Organisations

Austria Austrian National Tourist Office (ANTO)

Belgium Flanders: Tourism Flanders

Wallonia: Tourist Office for Wallonia-Brussels

Bulgaria Bulgarian State Agency for Tourism

Croatia Croatian National Tourist Board (CNTB)

Cyprus Cyprus Tourism Organisation (CTO)

Czech Republic CzechTourism

Denmark VisitDenmark

Estonia Estonian Tourist Board - Enterprise Estonia (ETB)

Finland Finnish Tourist Board (MEK)

Germany German National Tourist Board (GNTB)

Greece Greek National Tourism Organisation (GNTO)

Hungary Hungarian Tourism Plc.

Iceland Icelandic Tourist Board

Ireland Fáilte Ireland and Tourism Ireland Ltd.

Italy ENIT – Agenzia Nazionale del Turismo

Latvia Latvian Tourism Development Agency (TAVA)

Lithuania Lithuanian State Department of Tourism

Luxembourg Luxembourg National Tourist Office (ONT)

Malta Malta Tourism Authority (MTA)

Monaco Monaco Government Tourist and Convention Office (DTC)

Montenegro National Tourism Organisation of Montenegro

Norway Innovation Norway

Poland Polish National Tourist Office (PNTO)

Portugal Turismo de Portugal, I.P.

Romania Ministry of Regional Development and Tourism

San Marino State Office for Tourism

Serbia National Tourism Organisation of Serbia (TOS)

Slovakia Slovak Tourist Board

Slovenia SPIRIT Slovenia

Spain Turespaña - Instituto de Turismo de España

Sweden VisitSweden

Switzerland Switzerland Tourism (ST)

Turkey Ministry of Culture and Tourism

european tourism in 2013: trends & prospects (q1/2013)...1 unwto, world tourism barometer,...

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