european tourism q3/12 trends&prospects

EUROPEAN TOURISM in 2012: TRENDS & PROSPECTS

Quarterly Report (Q3/2012)

A quarterly insights report produced for the Market Intelligence Group

of the European Travel Commission (ETC) by Tourism Economics (an Oxford Economics Company)

Brussels, October 2012 ETC Market Intelligence Report

Copyright © 2012 European Travel Commission

European Tourism in 2012: Trends & Prospects (Q3/2012)

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

Photo © iStockphoto / Martin Wahlborg – Gothenburg city canal, Sweden

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mailto:[email protected]

European Tourism: Trends & Prospects (Q3/2012) 1

© European Travel Commission, October 2012

Foreword

Despite ongoing economic troubles, including a fall back into recession for the Eurozone, tourism within Europe has continued to grow with increased arrivals from several key origin markets. However, the rate of growth has slowed in recent months.

Intra-regional demand has grown as European travellers seek cost savings with shorter trips. And despite recent slowing, European destinations are also attracting more visitors from key long-haul origin markets.

With data now available for much of the peak summer season it is likely that these trends are reflective of demand for the year as a whole.

European carriers report continued growth in air demand, with strongest performance evident for flights within the continent. Longer-haul demand is exhibiting signs of slowing in response to a sputtering global economy.

Average occupancy rates of European hotels show a small decline for the year to date and notably in Southern European destinations. Yet, there are clear continued gains in some smaller Eastern European countries.

Hotels have been able to raise rates but these gains remain subdued, especially in the face of other cost increases, and operators remain under pressure. Data suggest a rise in demand for less expensive options including a shorter length of stay on tourism trips and a rise in non-hotel demand. While growth in arrivals continues, the contribution to revenue in the tourism industry remains under pressure.

The near term outlook faces continued headwinds and Tourism Economics expects growth in European tourism to be both modest and uneven in the coming year as the Eurozone fends off a financial crisis and works toward policies that balance the objectives of fiscal order and economic growth.

Nonetheless, the recent growth of both regional and long haul markets, even in this challenging economic climate, portray the resilience of the European travel industry once again. We trust you will find the analysis in this report helpful as you track your own destination’s performance and seek to anticipate future trends.

Best wishes,

Leslie Vella Chairman ETC Market Intelligence Group

Travel demand continues to grow

throughout 2012

However, performance has

slowed significantly

Cost savings are being sought in the uncertain economic

environment

2 European Tourism: Trends & Prospects (Q3/2012)


Executive Summary

European travel proves resilient in the face of the weak and uncertain global economic environment, with growth in visits reported for most destinations including from both long-haul and European markets.

However, growth has slowed as the year has progressed indicated by air transport and accommodation data as well as available arrivals data. Passenger load factors have reached a plateau while hotel occupancy for Europe as a whole has fallen slightly.

This is partly explained by cost-saving behaviours to face the uncertain economic environment, with an increase in intra-regional as well as domestic tourism demand. Hotel demand also appears to be weaker than total tourism demand indicating a rise in demand for other forms of accommodation.

Among European airlines, long-haul air traffic demand has shown the greatest slowdown while intra-European demand remains stout.

The strongest growth in European tourism demand is concentrated in smaller, emerging Eastern destinations which tend to involve lower costs than some of the more developed Western destination markets.

Prices, and therefore revenue and profits, remain under pressure. Hotel average daily rates (ADR) in most markets are still lower than pre-recession peaks, especially once wider inflation is taken into account.

The economic outlook remains uncertain although the near-term risk of Eurozone break-up appears to have faded. The longer-run outlook remains uncertain and risks of further, deeper recessions in the future remain.

TourMIS data on arrivals from key source markets echo the trends seen in the industry data. Intra-European travel is benefitting from a shift away from more expensive, long-haul travel. Japanese arrivals continue to rebound following last year’s natural and nuclear disasters in Japan.

60

65

70

75

80

85

90

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

weekly load factor, %

Source: AEA

European airlines passenger load factor

2011

2012

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-2

0

2

4

6

8

10

Europe EasternEurope

NorthernEurope

SouthernEurope

WesternEurope

2010 2011 2012 (Jan-Aug)

Occupancy trends in Europe% change year ago

Source: STR Global

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-5

0

5

10

15

20

Icel

and

Pol

and

Spa

inR

oman

iaLi

thua

nia

Ger

man

yH

unga

ryC

zech

Rep

ublic

Latv

iaS

erbi

aS

love

nia

Cro

atia

Net

herla

nds

Aus

tria

Mon

tene

gro

Cyp

rus

Est

onia

Uni

ted

Kin

gdom

Slo

vaki

aB

elgi

umB

ulga

riaM

alta

Italy

Irela

nd

Foreign visits to select destinations2012, year-to-date*, % change year ago

Source : TourMIS *date varies (Mar-Sep) by destination

European Tourism in 2012: Trends & Prospects (Q3/2012) 3

© European Travel Commission October 2012

2012 Tourism Performance Summary 2012 European travel data indicate that international travel to the region has continued to expand into the peak summer season but has slowed. Some of the large established Western European destinations have posted growth in the first eight months of 2012 although Central and Eastern European destinations continue to lead the way. However, hotel performance data present a more mixed picture of performance. Of the 27 reported countries, 17 are showing declines in occupancy through August. This difference can partly be explained by supply trends but may also be due to cost savings and a rise in non-hotel accommodation, while average length of stay is also falling.

Country % ytd to month Country % ytd to month Country % ytd Country % ytdIceland 16.2 Aug Poland 12.8 Jun Iceland 18.7 Estonia 16.1Poland 14.2 Jun Lithuania 11.2 Jun Russia 7.3 Italy 12.9Spain 14.2 Aug Latvia 11.1 Jun Poland 6.6 Hungary 9.5Romania 12.4 Jul Romania 9.7 Jul Slovakia 6.5 Romania 7.4Lithuania 11.8 Jun Serbia 8.6 Aug Czech Republic 4.8 Ireland 6.6Germany 7.7 Aug Germany 8.5 Aug Malta 3.3 Poland 6.6Hungary 7.3 Aug Spain 8.5 Aug Estonia 2.5 Finland 6.0Czech Republic 6.9 Jun Finland 7.8 Jul Germany 1.7 Netherlands 5.5Latvia 6.4 Jun Hungary 7.3 Aug Ireland 1.6 Czech Republic 5.4Serbia 6.1 Aug Croatia 6.3 Sep Hungary 0.0 Denmark 4.0Slovenia 5.8 Jul Czech Rep. 6.0 Jun Austria -0.3 Turkey 3.9Croatia 5.1 Sep Malta 5.9 Aug Turkey -0.3 France 3.6Netherlands 4.9 Jun Slovenia 5.2 Jul Portugal -0.9 Portugal 3.0Austria 4.6 Jul Austria 4.8 Jul Finland -1.0 Iceland 2.9Montenegro 4.6 Aug Sweden 3.9 Aug Denmark -1.1 Germany 2.4Cyprus 4.0 Aug Portugal 3.5 Jul Norway -1.3 Austria 1.5Estonia 4.0 Aug Montenegro 3.4 Aug France -1.5 Russia 1.5United Kingdom 3.0 May Netherlands 3.2 Jun Belgium -1.6 Spain 1.4Slovakia 1.4 Mar Estonia 2.0 Aug Romania -2.3 Lithuania 1.4Belgium 1.3 Jun Bulgaria 1.3 Jun Spain -2.3 Norway 1.3Bulgaria 1.3 Aug Luxembourg 1.2 Aug Lithuania -2.4 Belgium 0.6Malta 0.7 Aug Norway 1.2 Aug Italy -3.3 Switzerland -2.6Italy -0.5 Jul Slovakia 0.3 Mar Netherlands -3.3 Malta -3.8Ireland -1.4 Aug Belgium -0.1 Jun Switzerland -3.9 Greece -9.8

Cyprus -0.9 Jun Greece -5.2 Iceland -12.7Switzerland -5.8 Aug Malta -8.9 Slovakia -18.8

Sources: TourMIS (tourist arrivals and nights including resident and inbound), STR Global (hotel occupancy and ADR)

Measures used for nights and arrivals vary by country

Based on data available through 18 October, 2012ADR = average daily rate, LCU = local currency unit. Please refer to the glossary included at the end of the report for more details.

2012 Performance, Year to DateTourist Arrivals and Nights Hotel Performance, Jan-Aug

International Arrivals International Nights Hotel Occupancy Hotel ADR (LCU)

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Icel

and

Pola

ndSp

ain

Rom

ania

Lith

uani

aG

erm

any

Hun

gary

Cze

ch R

epub

licLa

tvia

Serb

iaSl

oven

iaC

roat

iaN

ethe

rland

sAu

stria

Mon

tene

gro

Cyp

rus

Esto

nia

Uni

ted

King

dom

Slov

akia

Belg

ium

Bulg

aria

Mal

taIta

lyIre

land

Foreign visits to select destinations2012, year-to-date*, % change year ago


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-5

0

5

10

15

20

Pol

and

Lith

uani

aLa

tvia

Rom

ania

Ser

bia

Ger

man

yS

pain

Finl

and

Hun

gary

Cro

atia

Cze

ch R

epub

licM

alta

Slo

veni

aA

ustri

aS

wed

enP

ortu

gal

Mon

tene

gro

Net

herla

nds

Est

onia

Bul

garia

Luxe

mbo

urg

Nor

way

Slo

vaki

aB

elgi

umC

ypru

sD

enm

ark

Sw

itzer

land

Foreign visitor nights in select destinations2012, year-to-date*, % change year ago


David Mora

David Mora



Global Economy: Could growth surprise on the upside in 2013?

The summer Eurozone financial market rally was

partly reversed in the second half of September. Recent data show that the Eurozone is still in recession, and there are few signs that the downturn is easing. Household purchasing power is expected to fall for the third consecutive year in 2012, hit by low nominal wage increases, falls in employment, cuts in government subsidies and persistently high inflation. Oxford Economics thinks that the recession that started in Q4 2011 will continue throughout 2012 and, for the year as a whole, forecasts a 0.6% fall in GDP.

At the September Federal Reserve Open Market Committee (FOMC) meeting, the US Federal Reserve (Fed) announced a potentially open-ended programme of asset purchases, involving buying US$40 billion per month of mortgage-backed securities.

The Fed signalled a strong commitment to boosting the recovery stressing that policy would remain ‘highly accommodative’ even after the recovery strengthens.

Japan also relaxed policy last month and the UK is likely to do so again later this year. And the ECB’s looser stance since late 2011 has started to improve monetary trends in the Eurozone. Against this background global stocks are up 20% on a year ago, and the question arises as to whether world economic growth could surprise on the upside in 2013.

However, the global economy still faces major headwinds. Not least of these is the fiscal tightening planned in the Eurozone and other major economies through next year, which threatens to blunt the impact of loose monetary policy. As it is, broad money supply growth in the major economies – while improving – is still only consistent with modest GDP growth.

On top of this, the soft patch in the emerging economies including China has continued into Q3. The slowdown in Asia has also hit Japan, which now risks dropping back into technical recession in second half of 2012.

Reflecting these headwinds, Oxford Economics’ forecasts for global real GDP growth in 2012 and 2013 are 3.0% and 3.3% respectively. Given the continued downside risks from issues such as the US ‘fiscal cliff’ and the Eurozone financial crisis, it is quite likely that 2013 will see policymakers once again having to increase their efforts to strengthen the global recovery.

0 1 2 3 4

Japan

Germany

US

France

Eurozone

UK

Italy

Spain

World: fiscal tighteningDiscretionary fiscal tightening, % of GDP, 2012-2013

Source : Oxford Economics/IMF

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

World: Advanced economies money growth% annual growth in real broad money

l

Source : Oxford Economics/Haver Analytics

Eurozone

Average of US, UK, Eurozone & Japan



Recent Industry Performance Slowdown but still growth in 2012

Reflecting the sluggish global economic recovery, international air travel is expanding at a reduced, but robust pace.

Slower air travel demand means additional supply is sufficient to match the additional capacity and load factors have reached a plateau.

Although Eastern European hotel demand held up in the first eight months of 2012, all other regions showed next to minimal growth prompting a small contraction in European occupancy rates.

Air Transport Global international air passenger traffic flows have slowed significantly in summer 2012 and are well below the +7% year-on-year advances recorded in the February-April period. Air traffic, measued in Revenue passenger kilometers (RPK), reached 5.3% in August following a sharp deceleration in July of just 3.5% growth.

Growth in 2012 to date has been driven by expansion in Middle Eastern air traffic, including some rebound from the slowdown in 2011 due to the Arab Spring. The longer-run trend is consistent with rising travel demand from the region as well as increased market share for Middle eastern destinations. The slower demand in July is likely due in part to the timing of Ramadan.

The moderation in air passenger traffic flows reflects the heightened uncertainty facing consumers worldwide. Air passenger travel appears to be moving in line with the broader, sluggish economic environment.

0

5

10

15

20

Africa Asia/Pacific Europe LatinAmerica

Mid.East N.America World

2010

2011

2012

% year, RPK

Source: IATA

International air passenger growth by region

asd

0

5

10

15

20

Africa Asia/Pacific Europe LatinAmerica

Mid.East N.America World

Jun-2012

Jul-2012

Aug-2012

% year, RPK

Source: IATA

International air passenger growth by region

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-9

-6

-3

0

3

6

9

12

15

18

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12

RPK = revenue passenger kms

Source: IATA

3 month moving average

Icelandic Ash Cloud Impact

International air passenger traffic growth% year, RPK



European passenger traffic growth remains robust in 2012, benefiting from robust intra-European and domestic expansion. Revenue passenger kilometers for European airlines have grown by 6.2% in the first eight months with some slowdown evident as the year has progressed.

During the same period, European airline cross-border air traffic has weakened somewhat, posting a 4.3% RPK advance. Europe-North America demand remains lacklustre at 4.3%. Meanwhile, Europe-Far East air travel has been even more subdued and only recorded a 3.3% increase. As was observed in 2008, European travellers have shifted away from long haul trips. As a consequence, intra-European RPK has risen to well above its previous peak.

On average, load factors which had strengthened through 2011 and into 2012 have plateaued. There have been some marginal increases during 2012 to date despite continued additions to capacity. Improvements may not have been as high as some operators would have hoped for, but it is indicative of healthy demand comparable to load factors experienced in the years prior to recession.

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-10

0

10

20

30

40

2009

w40

2010

w1

2010

w14

2010

w27

2010

w40

2011

w1

2011

w14

2011

w27

2011

w40

2012

w1

2012

w14

2012

w27

2012

w40

RPK, 4 week moving average, % change year ago


Source: AEA

European airline passenger traffic

Europe- Americas

Total European Airlines

-20

-10

0

10

20

30

40

2009

w40

2010

w1

2010

w14

2010

w27

2010

w40

2011

w1

2011

w14

2011

w27

2011

w40

2012

w1

2012

w14

2012

w27

2012

w40

RPK, 4 week moving average, % change year ago


Source: AEA

European airline passenger traffic

Europe-Asia

Total European Airlines

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1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

weekly load factor, %

Source: AEA

European airlines passenger load factor

2011

2012

-20-15-10

-505

101520253035

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

4 week moving average, Available Seat Km. (ASK), % change year ago

Source: AEA

European airlines capacity

2010

2011

2012



Accommodation

The global hotel industry continues to perform well in 2012. Recent STR Global data indicate RevPAR (revenue per available room) expanded in the first eight months of the year. The Americas region continues to stand out as experiencing strong growth in all three indicators as compared to other regions. The region is dominated by the US where hotel performance continues to exceed expectations this year.

European hotels experienced a surprisingly strong advance of 5.5% in ADR, despite a 0.2% contraction in the occupancy rate. Although hotels are facing slowing demand, additional room supply factors into the declining occupancy rate. During the same period, Asia Pacific recorded steady ADR advances despite lacklustre performances in occupancy rates. Altogether this has resulted in the slowest growth in terms of RevPAR among the regions.

Contrary to the experiences of Europe and Asia Pacific, the Middle East and Africa region has recorded robust occupancy rate growth while room rates have deteriorated. However, occupancy growth is largely an offset to large falls in 2011 due to the Arab Spring. Average room rates were not cut significantly in response so there is limited scope to raise rates in 2012 while demand remains below its long run trend in some markets.

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0

1

2

3

4

5

6

7

8

9

Asia/Pacific Americas Europe MiddleEast/Africa

Occ ADR* RevPAR*

Global Hotel Performance, Jan-Aug 2012% change year ago

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

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-2

0

2

4

6

8

10

12

Europe EasternEurope

NorthernEurope

SouthernEurope

WesternEurope

Occ ADR (€) RevPAR (€)

European hotel performance, Jan-Aug 2012% change year

Source: STR Global



Within Europe hotels in Eastern European markets continue to outperform the wider region with growth in both occupancy and ADR causing RevPAR to rise 9.3% in the first eight months of the year. Although, this growth does partly reflect the relatively smaller initial base. By contrast, Northern European hotel demand has been subdued in 2012 to date with almost zero growth in occupancy through August while occupancy in Southern Europe fell 1.7%.

Overall European occupancy in 2012 to date has been slightly lower than in the comparable period in 2011. As this period includes the peak summer season, occupancy for the year as a whole is expected to fall. The weaker performance in 2012 was expected to some extent as part of the slowdown from the rebound in 2010 but the scale of slowdown has been greater than hoped.

Weakness is also evident in the country specific data which shows that 13 out of 25 destination countries experienced a contraction in occupancy in the first eight months of 2012. It is also instructive to consider the level of occupancy as some of the falls have been in larger destinations with a typically high rate and which carry a higher weight in regional aggregation. Some of the stronger growth rates are in the lower occupancy destinations which have greater potential for growth. Iceland experienced the strongest occupancy gains and recorded an average occupancy of over 90% thus far in 2012.

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Icel

and

Mal

taIre

land

Hun

gary

Est

onia

Cze

ch R

ep.

Por

tuga

lIs

rael UK

Den

mar

kA

ustri

aS

pain

Finl

and

Lith

uani

aN

ethe

rland

sFr

ance

Ger

man

yS

witz

erla

ndR

ussi

aP

olan

dG

reec

eB

elgi

umTu

rkey

Italy

Slo

vaki

aR

oman

ia

2011 2012

Hotel occupancy ratesJan-Aug YTD occupancy, %

Source: STR Global

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-2

0

2

4

6

8

10

Europe Eastern Europe

Northern Europe

Southern Europe

Western Europe

2010 2011 2012 (Jan-Aug)

Occupancy trends in Europe% change year ago

Source: STR Global

-6-4-202468

101214

Icel

and

Slo

vaki

aR

ussi

aLi

thua

nia

Pol

and

Hun

gary

Ger

man

yIre

land

Cze

ch R

ep.

Aus

tria

Est

onia

Turk

eyD

enm

ark

Net

herla

nds

Bel

gium

Mal

taFr

ance

Rom

ania

Finl

and

Spa

in UK

Por

tuga

lS

witz

erla

ndIta

lyG

reec

e

Hotel occupancy ratesJan-Aug YTD, % change year ago

Source: STR Global

David Mora

David Mora



ADR has grown in all European sub-regions in the year to date by 5.5% allowing RevPAR in Europe to rise by 5.3%. Hoteliers continue to increase prices in an attempt to bring rates back to their previous peaks, while ongoing inflation continues to squeeze margins. ADR remains lower than previous peak rates in most destinations, especially when adjusted for inflation, and increases are not necessarily indicative of underlying demand or confidence by hoteliers. Prices are also under pressure from consumers who appear to be seeking cost savings.

RevPAR fell in 7 out of 25 reporting destinations during the first eights months of 2012. This is a more positive picture than looking at just occupancy, but there is little change in some of Europe’s largest destinations. However several Central & Eastern European destinations, including Poland, Estonia and Hungary have posted above 10% increases in RevPAR.

Source: STR Global

% change year ago Occ ADR RevPARAustria 0.3 2.0 2.3Belgium -1.0 0.2 -0.7Czech Republic 1.7 5.5 7.4Denmark -0.7 5.5 4.7Estonia 0.2 13.8 14.0Finland -1.8 6.4 4.5France -1.2 3.7 2.4Germany 2.6 3.2 6.0Greece -3.2 -5.6 -8.7Hungary 3.5 8.2 12.0Iceland 12.3 5.6 18.7Ireland 2.1 8.5 10.8Italy -2.8 1.3 -1.5Lithuania 3.8 -3.6 0.1Malta -1.0 5.1 4.1Netherlands -0.9 0.4 -0.4Poland 3.6 17.7 21.9Portugal -2.1 -1.5 -3.6Romania -1.7 6.9 5.1Russia 6.6 2.5 9.3Slovakia 9.4 -13.9 -5.8Spain -1.9 3.1 1.1Switzerland -2.4 -1.3 -3.8Turkey 0.2 2.3 2.6United Kingdom -2.0 4.2 2.1

Lodging Performance - Jan-Aug 2012

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25

Pol

and

Icel

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Est

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Hun

gary

Irela

ndR

ussi

aC

zech

Rep

.G

erm

any

Rom

ania

Den

mar

kFi

nlan

dM

alta

Turk

eyFr

ance

Aus

tria

UK

Spa

inLi

thua

nia

Net

herla

nds

Bel

gium Ita

lyP

ortu

gal

Sw

itzer

land

Slo

vaki

aG

reec

e

Hotel revenue per available room (RevPAR)Jan-Aug YTD, local currency, % change year ago

Source: STR Global

David Mora

David Mora



Key Source Market Performance

A strong recovery in 2011 gives way to more uneven growth

Outbound performance in 2012 to date has been uneven in most major European source markets but with an overall downward trend. Russia continues to be the star performer with growth in almost all destinations.

While US arrivals to Emerging Europe continue to increase, the UK has experienced a fall in demand from US travellers. Meanwhile, arrivals from Japan continue to recover from 2011’s disasters.

Travel from European origins is slower than in 2011, but destinations still report growth, possibly at the expense of longer-haul destinations as cost savings are sought.

Key intra-European markets In the first eight months of 2012 travel from Germany expanded to most destinations in Europe. In particular, German visits to Eastern European destinations were robust. German travel growth to some large and more expensive Western European destinations, including Switzerland, UK and Belgium as well as some affordable locations slipped in the first eight months of the year, possibly revealing that customers are reacting to heightened economic uncertainty by cutting back on travel to more expensive locations.

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25

Rom

ania

Lith

uani

aC

roat

iaIc

elan

dSl

oven

iaEs

toni

aLa

tvia

Serb

iaH

unga

ryAu

stria

Cyp

rus

Net

herla

nds

Mal

taPo

land

Cze

ch R

epub

licSl

ovak

iaSp

ain

Italy

Belg

ium

Mon

tene

gro

Bulg

aria

Uni

ted

King

dom

Visits from Germany to select destinations2012, year-to-date*, % change year ago

Source : TourMIS *date varies (Mar-Sep) by destination-15

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15

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25

Lith

uani

aLa

tvia

Rom

ania

Cro

atia

Portu

gal

Serb

iaSl

oven

iaM

alta

Pola

ndAu

stria

Esto

nia

Finl

and

Hun

gary

Bulg

aria

Luxe

mbo

urg

Net

herla

nds

Cze

ch R

epub

licM

onte

negr

oSp

ain

Swed

enSl

ovak

iaBe

lgiu

mN

orw

ayC

ypru

sD

enm

ark

Switz

erla

nd

German visitor nights in select destinations2012, year-to-date*, % change year ago


David Mora

David Mora

David Mora

David Mora

David Mora

David Mora

David Mora

David Mora

David Mora

David Mora

David Mora



A similar pattern emerged for the Dutch market, with the share of travel to Eastern European destinations expanding as travel to some developed markets remains subdued. Overall travel trends from the Netherlands for 2012 to date suggest continued growth.

The French outbound travel market also remains mixed in 2012. Of the 22 destinations reporting visits data, eight experienced declines in visits while a further three destinations recorded anaemic growth (less than 1.5%). Nights data supported this mixed picture, with nine out of the 26 reporting destinations posting falls in the number of nights spent by French visitors in the first eight months of 2012. Strong growth is overwhelmingly to emerging European destinations but also with growth to some Western and Scandinavian destinations.

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Slov

enia

Rom

ania

Hun

gary

Cro

atia

Serb

iaIc

elan

dEs

toni

aG

erm

any

Aust

riaLi

thua

nia

Spai

nM

alta

Pola

ndBe

lgiu

mBu

lgar

iaSl

ovak

iaC

zech

Rep

ublic

Uni

ted

King

dom

Italy

Cyp

rus

Mon

tene

gro

Visits from Netherlands to select destinations2012, year-to-date*, % change year ago


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0

10

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30

40

Slov

enia

Hun

gary

Lith

uani

aC

roat

iaSe

rbia

Rom

ania

Mon

tene

gro

Portu

gal

Esto

nia

Aust

riaG

erm

any

Spai

nM

alta

Pola

ndFi

nlan

dSl

ovak

iaBu

lgar

iaLu

xem

bour

gBe

lgiu

mC

zech

Rep

ublic

Swed

enD

enm

ark

Nor

way

Switz

erla

ndC

ypru

s

Netherlands nights in select destinations2012, year-to-date*, % change year ago


-25

-20

-15

-10

-5

0

5

10

15

20

25

Lith

uani

aLa

tvia

Serb

iaIc

elan

dM

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negr

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Visits from France to select destinations2012, year-to-date*, % change year ago


-20

-15

-10

-5

0

5

10

15

20

25

Latv

iaSe

rbia

Bulg

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Mon

tene

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Portu

gal

Rom

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Slov

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Den

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and

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Rep

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French visitor nights in select destinations2012, year-to-date*, % change year ago


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The Italian outbound trend is generally weaker compared to other markets and also shows mixed results. Of the reporting destinations, a third of the 18 show the number of visitors fell during the first eight months of 2012. Meanwhile, 11 of the 26 reporting destinations recorded declines in the number of nights spent by Italian visitors.

Following the solid advances recorded in the early part of 2012, the UK outbound travel market appears to have tapered slightly with a third of the 18 reporting destinations posting declines in the number of UK visits. Western as well as Eastern European destinations showed some weakness, but the main growth destinations were mostly in Eastern Europe. Destinations in this region are generally lower cost but also lower volume markets and not necessarily indicative of a healthy UK outbound market. The growth trend for UK outbound appears to have deteriorated somewhat, also consistent with recent data released for UK departures to Europe and the world.

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0

10

20

30

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Cyp

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Serb

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Visits from Italy to select destinations2012, year-to-date*, % change year ago


96 >

-30

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-10

0

10

20

30

40

50

60

Serb

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Italian visitor nights in select destinations2012, year-to-date*, % change year ago

Source : TourMIS *date varies (Mar-Sep) by destination78

>

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Icel

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Visits from UK to select destinations2012, year-to-date*, % change year ago


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Cro

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British visitor nights in select destinations2012, year-to-date*, % change year ago


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Russia has kept its position as the top performing source market. 18 out of 22 destinations recorded visitor growth from Russia which exceeded 10%. Established destinations as well as emerging destinations throughout Europe continue to benefit from this robust growth in Russian travel demand.

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Icel

and

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Slov

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Cyp

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Italy

Bulg

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Visits from Russia to select destinations2012, year-to-date*, % change year ago


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50

60

Pola

ndM

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Latv

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Portu

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Russian visitor nights in select destinations2012, year-to-date*, % change year ago


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Non-European markets Most destinations in Europe experienced a rise in American visitors. In particular, Eastern European destinations, including Slovakia, Estonia, Croatia, Serbia and the Czech Republic have recorded strong growth surpassing 15% and 9 destinations reported double-digit growth in arrivals, although these are lower volume markets. Given that the UK holds the most significant market share, the modest climb (3%) in American visitors to the UK is still noteworthy and the trend for US outbound, in general, shows growth.

The effects of the catastrophic earthquake, tsunami, and nuclear disaster in early 2011 continues to characterise Japan travel data as growth to almost all destinations are benefiting from strong growth as demand is rebounding.

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Visits from US to select destinations2012, year-to-date*, % change year ago


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US visitor nights in select destinations2011, year-to-date*, % change year ago


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Cyp

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Slov

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Uni

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King

dom

Pola

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Visits from Japan to select destinations2012, year-to-date*, % change year ago


270

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Japanese visitor nights in select destinations2012, year-to-date*, % change year ago


73 >

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Origin Market Share Analysis Based on the Tourism Decision Metrics (TDM) model, the following charts and analysis show Europe’s evolving market position - both in absolute and percentage terms - for selected source markets.

United States

82.0 million tourists traveled from the US in 2011. Of these, 32.5 million traveled within North America, while 49.4 million (60.3%) traveled to long haul destinations.

US tourist arrivals to Europe in 2011 totaled 21.1 million, representing 42.8% of the US long haul outbound market.

US tourist arrivals to Northern Europe in 2011 totaled 4.9 million, representing 23.2% of US arrivals to Europe.

US tourist arrivals to Western Europe in 2011 totaled 8.0 million, representing 38.1% of US arrivals to Europe.

US tourist arrivals to Southern Europe in 2011 totaled 5.5 million, representing 25.8% of US arrivals to Europe.

US tourist arrivals to Central/Eastern Europe in 2011 totaled 2.7 million, representing 12.9% of US arrivals to Europe.

Northern Europe's share of the US market was 9.9% in 2011, a 4.0 percentage point decrease from 2001.

Western Europe's share of the US market was 16.3% in 2011, a 5.9 percentage point decrease from 2001.

Southern Europe's share of the US market was 11.0% in 2011, a 1.6 percentage point increase from 2001.

Central/Eastern Europe's share of the US market was 5.5% in 2011, a 0.2 percentage point increase from 2001.

Long haul outbound from the US is forecast to grow 5.3% per year on average through 2016.

Arrivals to Northern Europe are expected to increase 28.9% through 2016, to 6.3 million. Northern Europe's share of the US market is forecast to fall to 9.9% in 2016.

US long haul* outbound travel

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rest of Long Haul

Central/Eastern Europe

Southern Europe

Western Europe

Northern Europe

Million

*Long haul defined as tourist arrivals to destinations outside North AmericaSource: Tourism Economics

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Arrivals to Western Europe are expected to increase 26.2% through 2016, to 10.2 million. Western Europe's share of the US market is forecast to fall to 15.9% in 2016.

Arrivals to Southern Europe are expected to increase 15.2% through 2016, to 6.3 million. Southern Europe's share of the US market is forecast to fall to 9.8% in 2016.

Arrivals to Central/Eastern Europe are expected to increase 35.2% through 2016, to 3.7 million. Central/Eastern Europe's share of the US market is forecast to rise to 5.8% in 2016.

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

Europe's share of US market

0%

5%

10%

15%

20%

25%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Northern Europe

Western Europe

Southern Europe

Central/Eastern Europe

% of long haul* market


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Canada

32.7 million tourists traveled from Canada in 2011. Of these, 21.6

million traveled within North America, while 11.0 million (33.8%)

traveled to long haul destinations.

Canadian tourist arrivals to Europe in 2011 totaled 4.3 million,

representing 39.2% of the Canadian long haul outbound market.

Canadian tourist arrivals to Northern Europe in 2011 totaled 1.0

million, representing 23.5% of Canadian arrivals to Europe.

Canadian tourist arrivals to Western Europe in 2011 totaled 1.6


Canadian tourist arrivals to Southern Europe in 2011 totaled 1.3


Canadian tourist arrivals to Central/Eastern Europe in 2011 totaled

0.4 million, representing 8.8% of Canadian arrivals to Europe.

Northern Europe's share of the Canadian market was 9.2% in

2011, a 4.3 percentage point decrease from 2001.

Western Europe's share of the Canadian market was 14.9% in


Southern Europe's share of the Canadian market was 11.6% in

2011, a 0.8 percentage point increase from 2001.

Central/Eastern Europe's share of the Canadian market was 3.5%

in 2011, a 0.5 percentage point increase from 2001.

Long haul outbound from Canada is forecast to grow 2.5% per

year on average through 2016.

Arrivals to Northern Europe are expected to increase 20.8%

through 2016, to 1.2 million. Northern Europe's share of the

Canadian market is forecast to rise to 9.9% in 2016.

Arrivals to Western Europe are expected to increase 8.0% through

2016, to 1.8 million. Western Europe's share of the Canadian

market is forecast to fall to 14.3% in 2016.

Arrivals to Southern Europe are expected to increase 5.1% through

2016, to 1.3 million. Southern Europe's share of the Canadian


Arrivals to Central/Eastern Europe are expected to increase 17.6%

through 2016, to .4 million. Central/Eastern Europe's share of the

Canadian market is forecast to rise to 3.6% in 2016.

Canada long haul* outbound travel

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rest of Long HaulCentral/Eastern EuropeSouthern EuropeWestern EuropeNorthern Europe

Million


Europe's share of Canadian market

0%

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10%

15%

20%

25%20

01

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Northern EuropeWestern EuropeSouthern EuropeCentral/Eastern Europe



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Mexico

15.3 million tourists traveled from Mexico in 2011. Of these, 13.6

million traveled within North America, while 1.7 million (11.2%)


Mexican tourist arrivals to Europe in 2011 totaled 0.9 million,

representing 51.4% of the Mexican long haul outbound market.

Mexican tourist arrivals to Northern Europe in 2011 totaled 82,000,

representing 9.3% of Mexican arrivals to Europe.

Mexican tourist arrivals to Western Europe in 2011 totaled

453,000, representing 51.3% of Mexican arrivals to Europe.

Mexican tourist arrivals to Southern Europe in 2011 totaled


Mexican tourist arrivals to Central/Eastern Europe in 2011 totaled


Northern Europe's share of the Mexican market was 4.8% in 2011,

a 1.6 percentage point decrease from 2001.

Western Europe's share of the Mexican market was 26.4% in


Southern Europe's share of the Mexican market was 16.6% in


Central/Eastern Europe's share of the Mexican market was 3.6% in


Long haul outbound from Mexico is forecast to grow 6.5% per year

on average through 2016.

Arrivals to Northern Europe are expected to increase 0.3% through

2016, to 83,000. Northern Europe's share of the Mexican market is

forecast to fall to 3.5% in 2016.

Arrivals to Western Europe are expected to increase 30.9%

through 2016, to 592,000. Western Europe's share of the Mexican


Arrivals to Southern Europe are expected to increase 8.5% through

2016, to 309,000. Southern Europe's share of the Mexican market

is forecast to fall to 13.2% in 2016.


through 2016, to 86,000. Central/Eastern Europe's share of the

Mexican market is forecast to rise to 3.6% in 2016.

Mexico long haul* outbound travel

0.0

0.5

1.0

1.5

2.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million


Europe's share of Mexican market

0%

5%

10%

15%

20%

25%

30%

35%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016




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Argentina

6.3 million tourists traveled from Argentina in 2011. Of these, 4.6

million traveled within South America, while 1.7 million (26.9%)


Argentinian tourist arrivals to Europe in 2011 totaled 0.6 million,

representing 37.9% of the Argentinian long haul outbound market.

Argentinian tourist arrivals to Northern Europe in 2011 totaled

77,000, representing 11.9% of Argentinian arrivals to Europe.

Argentinian tourist arrivals to Western Europe in 2011 totaled


Argentinian tourist arrivals to Southern Europe in 2011 totaled


Argentinian tourist arrivals to Central/Eastern Europe in 2011

totaled 54,000, representing 8.4% of Argentinian arrivals to

Europe.

Northern Europe's share of the Argentinian market was 4.5% in


Western Europe's share of the Argentinian market was 2.2% in


Southern Europe's share of the Argentinian market was 28.0% in


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

3.2% in 2011, a 1.5 percentage point increase from 2001.

Long haul outbound from Argentina is forecast to grow 7.0% per



through 2016, to 146,000. Northern Europe's share of the

Argentinian market is forecast to rise to 6.1% in 2016.


through 2016, to 53,000. Western Europe's share of the


Arrivals to Southern Europe are expected to increase 39.0%

through 2016, to 664,000. Southern Europe's share of the

Argentinian market is forecast to fall to 27.8% in 2016.




Argentina long haul* outbound travel

0.0

0.5

1.0

1.5

2.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million

*Long haul defined as tourist arrivals to destinations outside South AmericaSource: Tourism Economics

Europe's share of Argentinean market

0%5%

10%15%20%25%30%35%40%45%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016




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Brazil

7.4 million tourists traveled from Brazil in 2011. Of these, 2.5

million traveled within South America, while 4.9 million (66.2%)


Brazilian tourist arrivals to Europe in 2011 totaled 2.5 million,

representing 50.9% of the Brazilian long haul outbound market.

Brazilian tourist arrivals to Northern Europe in 2011 totaled

276,000, representing 11.1% of Brazilian arrivals to Europe.

Brazilian tourist arrivals to Western Europe in 2011 totaled

1,223,000, representing 49.1% of Brazilian arrivals to Europe.

Brazilian tourist arrivals to Southern Europe in 2011 totaled


Brazilian tourist arrivals to Central/Eastern Europe in 2011 totaled


Northern Europe's share of the Brazilian market was 5.6% in 2011,

a 1.6 percentage point increase from 2001.

Western Europe's share of the Brazilian market was 25.0% in


Southern Europe's share of the Brazilian market was 17.0% in


Central/Eastern Europe's share of the Brazilian market was 3.3%


Long haul outbound from Brazil is forecast to grow 10.7% per year



through 2016, to 403,000. Northern Europe's share of the Brazilian



through 2016, to 1,508,000. Western Europe's share of the

Brazilian market is forecast to fall to 18.5% in 2016.


through 2016, to 998,000. Southern Europe's share of the Brazilian




Brazilian market is forecast to fall to 2.8% in 2016.

Brazil long haul* outbound travel

0

1

2

3

4

5

6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million


Europe's share of Brazilian market

0%

5%

10%

15%

20%

25%

30%

35%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016




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India

10.4 million tourists traveled from India in 2011. Of these, 0.5

million traveled within South Asia, while 9.9 million (95.2%)


Indian tourist arrivals to Europe in 2011 totaled 1.5 million,

representing 15.2% of the Indian long haul outbound market.

Indian tourist arrivals to Northern Europe in 2011 totaled 370,000,

representing 24.7% of Indian arrivals to Europe.

Indian tourist arrivals to Western Europe in 2011 totaled 633,000,


Indian tourist arrivals to Southern Europe in 2011 totaled 327,000,


Indian tourist arrivals to Central/Eastern Europe in 2011 totaled

169,000, representing 11.2% of Indian arrivals to Europe.

Northern Europe's share of the Indian market was 3.8% in 2011, a

2.5 percentage point decrease from 2001.

Western Europe's share of the Indian market was 6.4% in 2011, a

2.3 percentage point decrease from 2001.

Southern Europe's share of the Indian market was 3.3% in 2011, a

1.4 percentage point increase from 2001.

Central/Eastern Europe's share of the Indian market was 1.7% in


Long haul outbound from India is forecast to grow 8.7% per year



through 2016, to 448,000. Northern Europe's share of the Indian



through 2016, to 1,098,000. Western Europe's share of the Indian

market is forecast to rise to 7.3% in 2016.


through 2016, to 447,000. Southern Europe's share of the Indian




Indian market is forecast to rise to 2.0% in 2016.

India long haul* outbound travel

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million

*Long haul defined as tourist arrivals to destinations outside South AsiaSource: Tourism Economics

Europe's share of Indian market

0%

2%

4%

6%

8%

10%

12%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



*Long haul defined as tourist arrivals to destinations outside South AsiaSource: Tourism Economics

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China

40.1 million tourists traveled from China in 2011. Of these, 26.2

million traveled within Northeast Asia, while 13.8 million (34.5%)


Chinese tourist arrivals to Europe in 2011 totaled 4.9 million,

representing 35.6% of the Chinese long haul outbound market.

Chinese tourist arrivals to Northern Europe in 2011 totaled

244,000, representing 4.9% of Chinese arrivals to Europe.

Chinese tourist arrivals to Western Europe in 2011 totaled

2,924,000, representing 59.3% of Chinese arrivals to Europe.

Chinese tourist arrivals to Southern Europe in 2011 totaled

579,000, representing 11.8% of Chinese arrivals to Europe.

Chinese tourist arrivals to Central/Eastern Europe in 2011 totaled

1,181,000, representing 24.0% of Chinese arrivals to Europe.

Northern Europe's share of the Chinese market was 1.8% in 2011,


Western Europe's share of the Chinese market was 21.1% in 2011,


Southern Europe's share of the Chinese market was 4.2% in 2011,


Central/Eastern Europe's share of the Chinese market was 8.5% in


Long haul outbound from China is forecast to grow 8.0% per year



through 2016, to 349,000. Northern Europe's share of the Chinese




Chinese market is forecast to rise to 21.8% in 2016.


through 2016, to 918,000. Southern Europe's share of the Chinese

market is forecast to rise to 4.5% in 2016.


through 2016, to 1,642,000. Central/Eastern Europe's share of the

Chinese market is forecast to fall to 8.1% in 2016.

China long haul* outbound travel

0

2

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million

*Long haul defined as tourist arrivals to destinations outside Northeast AsiaSource: Tourism Economics

Europe's share of Chinese market

0%

5%

10%

15%

20%

25%20

01

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016




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Japan

20.5 million tourists traveled from Japan in 2011. Of these, 8.2

million traveled within Northeast Asia, while 12.3 million (60.0%)


Japanese tourist arrivals to Europe in 2011 totaled 3.9 million,

representing 32.1% of the Japanese long haul outbound market.

Japanese tourist arrivals to Northern Europe in 2011 totaled

443,000, representing 11.2% of Japanese arrivals to Europe.

Japanese tourist arrivals to Western Europe in 2011 totaled

1,935,000, representing 49.0% of Japanese arrivals to Europe.

Japanese tourist arrivals to Southern Europe in 2011 totaled

1,012,000, representing 25.6% of Japanese arrivals to Europe.

Japanese tourist arrivals to Central/Eastern Europe in 2011 totaled

559,000, representing 14.1% of Japanese arrivals to Europe.

Northern Europe's share of the Japanese market was 3.6% in


Western Europe's share of the Japanese market was 15.7% in


Southern Europe's share of the Japanese market was 8.2% in


Central/Eastern Europe's share of the Japanese market was 4.5%


Long haul outbound from Japan is forecast to grow 6.1% per year



through 2016, to 521,000. Northern Europe's share of the

Japanese market is forecast to fall to 3.2% in 2016.



Japanese market is forecast to rise to 16.3% in 2016.


through 2016, to 1,310,000. Southern Europe's share of the

Japanese market is forecast to fall to 7.9% in 2016.



Japanese market is forecast to rise to 4.7% in 2016.

Japan long haul* outbound travel

0

2

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million


Europe's share of Japanese market

0%2%4%6%8%

10%12%14%16%18%20%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016




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United Arab Emirates

4.1 million tourists traveled from the UAE in 2011. Of these, 2.9

million traveled within the Middle East, while 1.1 million (28.0%)


Emirati tourist arrivals to Europe in 2011 totaled 0.7 million,

representing 61.0% of the Emirati long haul outbound market.

Emirati tourist arrivals to Northern Europe in 2011 totaled 244,000,

representing 35.1% of Emirati arrivals to Europe.

Emirati tourist arrivals to Western Europe in 2011 totaled 307,000,


Emirati tourist arrivals to Southern Europe in 2011 totaled 135,000,


Emirati tourist arrivals to Central/Eastern Europe in 2011 totaled

9,000, representing 1.3% of Emirati arrivals to Europe.

Northern Europe's share of the Emirati market was 21.4% in 2011,


Western Europe's share of the Emirati market was 26.9% in 2011,


Southern Europe's share of the Emirati market was 11.8% in 2011,


Central/Eastern Europe's share of the Emirati market was 0.8% in


Long haul outbound from the UAE is forecast to grow 3.5% per



through 2016, to 277,000. Northern Europe's share of the Emirati


Arrivals to Western Europe are expected to increase 6.2% through

2016, to 326,000. Western Europe's share of the Emirati market is

forecast to fall to 24.1% in 2016.


through 2016, to 158,000. Southern Europe's share of the Emirati




Emirati market is forecast to rise to .9% in 2016.

UAE long haul* outbound travel

0.0

0.5

1.0

1.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Million

*Long haul defined as tourist arrivals to destinations outside the Middle EastSource: Tourism Economics

Europe's share of Emirati market

0%

5%

10%

15%

20%

25%

30%

35%20

01

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016



*Long haul defined as tourist arrivals to destinations outside the Middle EastSource: Tourism Economics

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Russia

26.8 million tourists traveled from Russia in 2011. Of these, 21.2

million (79.3%) traveled within Europe, while 5.6 million traveled to

destinations outside Europe.

Russian tourist arrivals to Northern Europe in 2011 totaled 1.2

million, representing 5.7% of Russian arrivals to Europe.

Russian tourist arrivals to Western Europe in 2011 totaled 1.7


Russian tourist arrivals to Southern Europe in 2011 totaled 6.3


Russian tourist arrivals to Central/Eastern Europe in 2011 totaled

12.0 million, representing 56.6% of Russian arrivals to Europe.

Northern Europe's share of the Russian market was 5.7% in 2011,


Western Europe's share of the Russian market was 7.9% in 2011,


Southern Europe's share of the Russian market was 29.8% in


Central/Eastern Europe's share of the Russian market was 56.6%

in 2011, a 14.3 percentage point decrease from 2001.

International outbound travel from Russia is forecast to grow 6.3%

per year on average through 2016.


through 2016, to 1.6 million. Northern Europe's share of the

Russian market is forecast to rise to 5.8% in 2016.


through 2016, to 1.9 million. Western Europe's share of the

Russian market is forecast to fall to 7.1% in 2016.


through 2016, to 8.6 million. Southern Europe's share of the

Russian market is forecast to rise to 31.5% in 2016.


through 2016, to 15.2 million. Central/Eastern Europe's share of

the Russian market is forecast to fall to 55.7% in 2016.

Russia outbound travel

0

5

10

15

20

25

30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rest of WorldCentral/Eastern EuropeSouthern EuropeWestern EuropeNorthern Europe

Million

*Outbound travel defined as tourist arrivals to all destinationsSource: Tourism Economics

Europe's share of Russian market

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016


% of outbound* market

*Outbound market defined as tourist arrivals to all destinationsSource: Tourism Economics

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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. Full origin-destination country detail is available online to subscribers.

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,

Sweden, UK

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

Northern Europe: Denmark, Finland, Iceland, Ireland, Norway, Sweden, UK

Western Europe: Austria, Belgium, France, Germany, Luxembourg, Netherlands, Switzerland

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, Latvia,

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

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

2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

World 6.5% 4.7% 3.7% 2.6% 4.3% 4.8% 6.0% 5.5% 3.6% 3.1% 4.5% 5.1%

Americas 6.5% 4.0% 3.6% 3.6% 5.0% 5.0% 2.6% 2.3% 4.6% 3.8% 5.6% 5.5%North America 6.6% 3.1% 2.6% 3.9% 5.2% 5.1% 1.8% 0.6% 3.6% 3.6% 5.2% 4.9%Caribbean 2.9% 3.6% 3.8% 2.8% 4.4% 4.3% 2.7% 1.2% 5.7% 3.6% 2.6% 4.4%Central & South America 8.7% 6.9% 6.7% 3.0% 4.9% 5.2% 6.0% 9.0% 7.8% 4.5% 7.8% 7.9%

Europe 2.9% 6.0% 2.4% 0.0% 2.9% 4.0% 2.2% 4.0% 1.9% 0.6% 3.2% 4.2%EU 2.5% 5.5% 2.4% -1.1% 1.9% 3.1% 0.3% 3.7% 1.8% -0.6% 2.2% 3.3%Non-EU 4.5% 8.1% 2.3% 3.9% 6.2% 6.8% 9.4% 5.4% 2.6% 4.6% 6.5% 7.0%

Northern 0.9% 5.4% 2.3% 0.0% 3.1% 2.5% -1.4% 5.0% 2.1% 0.0% 2.6% 4.0%Western 3.6% 3.5% 3.8% -0.2% 1.8% 2.5% 0.2% 3.3% 1.4% -0.7% 1.3% 2.2%Southern/Mediterranean 2.8% 7.6% 0.2% -1.3% 2.1% 4.7% 3.0% 1.6% -1.0% -1.2% 1.9% 3.6%Central/Eastern 3.1% 7.5% 4.0% 2.3% 5.5% 5.8% 6.9% 5.9% 4.5% 3.4% 6.2% 6.9% - Central & Baltic 3.9% 6.7% 4.7% 1.0% 4.3% 4.4% 1.7% 5.0% 5.4% 1.8% 6.2% 6.9%

Asia & the Pacific 13.1% 6.3% 6.3% 6.2% 6.5% 6.4% 13.0% 9.3% 6.8% 6.0% 6.4% 6.3%North East 13.8% 3.8% 6.4% 5.9% 6.9% 6.5% 11.2% 7.8% 7.3% 5.5% 6.1% 6.1%South East 13.2% 10.3% 6.5% 6.8% 6.4% 6.6% 20.3% 11.6% 5.4% 7.0% 7.0% 6.6%South 15.5% 11.5% 7.5% 5.7% 4.0% 4.8% 7.9% 17.0% 7.9% 8.9% 8.9% 8.1%Oceania 4.4% 2.7% 2.8% 5.8% 5.3% 4.8% 10.1% 6.8% 6.2% 2.7% 2.8% 3.8%

Africa 9.0% -7.9% 8.0% 5.5% 5.2% 4.9% 6.0% 4.0% 5.2% 5.4% 5.4% 5.8%

Mid East 13.5% 4.0% 1.0% 6.0% 5.3% 4.8% 11.9% 6.7% -0.6% 4.7% 2.6% 3.8%

* 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, Sweden, UK

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

Northern Europe = Denmark, Finland, Iceland, Ireland, Norway, Sweden, UKWestern Europe = Austria, Belgium, France, Germany, Luxembourg, Netherlands, SwitzerlandSouthern/Mediterranean Europe = Albania, Bosnia-Herzogovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy, Malta,

Montenegro, Portugal, Serbia, Slovenia, Spain, TurkeyCentral/Eastern Europe = Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan, Lativia,

Lithuania, Poland, Romania, Russian Federation, Slovakia, Ukraineof whichCentral Europe & Baltic countries = Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia

Inbound*

TDM Visitor Growth Forecasts, % changeOutbound**

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Economic Outlook for Key Markets Uncertain global economic recovery in 2013

Loose monetary policy: Global central banks move to relax policy signalling a strong commitment to boosting a recovery.

Austerity: However, fiscal tightening planned in the Eurozone and other major economies, threatens to blunt the impact of loose monetary policy through next year.

Slowdown: The soft patch in the emerging economies including China has continued into Q3. The slowdown in Asia has also hit Japan, which now risks dropping back into technical recession in the latter half of 2012.

Uncertain global recovery: Given the continued downside risks from issues such as the US ‘fiscal cliff’ and the Eurozone financial crisis, it is quite likely that 2013 will see policymakers once again having to increase their efforts to strengthen the global recovery.

0 1 2 3 4

Japan

Germany

US

France

Eurozone

UK

Italy

Spain

World: fiscal tighteningDiscretionary fiscal tightening, % of GDP, 2012-2013

Source : Oxford Economics/IMF

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

World: Advanced economies money growth% annual growth in real broad money

l


Eurozone

Average of US, UK, Eurozone & Japan

30

35

40

45

50

55

60

65

1998 2000 2002 2004 2006 2008 2010 2012

Eurozone: PMIsPMI index

Source : Markit

Services

Manufacturing

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

-20

-15

-10

-5

0

5

10

15

20

25

2001 2003 2005 2007 2009 2011

% year (3 month average)

Brazil

Source: Haver Analytics / Oxford Economics

BRICs: Industrial output

India

Russia

China



World 2005 PPP: A measure of GDP in real (2005) prices where PPP (purchasing power parity) is an implicit exchange

rate which equalises the price of goods and services across countries.

2011 2012 2013 2014 2015 2016Real GDP North America United States 1.8 2.1 2.5 3.3 3.4 3.0 Canada 2.4 2.0 2.1 2.6 2.6 2.5 Europe Eurozone 1.5 -0.6 -0.1 1.1 1.4 1.5 Germany 3.1 0.8 1.0 1.7 1.7 1.6 France 1.7 0.0 0.2 1.2 1.2 1.3 Italy 0.5 -2.5 -1.1 0.6 1.1 1.2 UK 0.9 -0.2 1.2 2.3 2.4 2.5 EU27 1.5 -0.3 0.3 1.5 1.8 1.8

Asia Japan -0.7 1.9 1.2 2.6 1.5 1.2 China 9.3 7.2 8.1 9.1 8.7 8.1 India 7.5 5.6 6.6 7.7 8.0 8.0

G7 1.4 1.3 1.6 2.6 2.5 2.3 World 2.9 2.2 2.5 3.7 3.7 3.5 World 2005 PPPs 3.9 3.0 3.3 4.4 4.5 4.4 World trade 7.0 2.1 4.7 7.2 7.0 6.5Inflation (CPI) North America United States 3.1 2.0 2.1 2.2 2.3 2.2 Canada 2.9 1.5 1.8 2.3 2.2 2.3

Europe Eurozone 2.7 2.5 1.9 1.6 1.3 1.3 Germany 2.3 2.0 1.8 1.8 1.5 1.5 France 2.1 2.1 1.7 1.6 1.4 1.3 Italy 2.8 3.1 2.7 1.8 1.1 1.2 UK 4.5 2.8 2.1 1.6 1.5 1.6 EU27 3.1 2.6 1.9 1.7 1.5 1.5 Asia Japan -0.3 0.0 -0.2 0.4 0.9 1.0 Emerging Asia, excl Japan 6.6 5.1 4.8 4.8 4.7 4.5 China 5.4 2.7 2.6 3.4 3.6 3.2 India 8.9 9.4 6.6 4.4 4.1 3.9

World 4.4 3.3 2.1 2.0 2.0 2.0Exchange Rates US$ Effective 70.9 73.6 76.6 80.4 82.7 83.3 $/€ 1.39 1.28 1.24 1.17 1.12 1.13 ¥/$ 79.7 79.9 87.9 94.1 95.7 97.4Commodity Prices Brent Oil ($/bl) 111.3 110.8 101.3 106.4 112.4 117.0

Summary of International Forecasts



Eurozone Economy The Eurozone financial market rally that lasted throughout the summer partly reversed in the second half of September. This is consistent with our view that the ECB’s recent policy moves, while critically important, are not enough to solve all the serious problems the Eurozone faces.

Recent data show that the Eurozone is still in recession, and there are few signs that the downturn is easing. Oxford economics projects that the recession that started in Q4 2011 will continue throughout 2012. For the year as a whole, Oxford Economics forecasts a 0.6% fall in GDP.

Domestic demand is expected to contract much more sharply than GDP, down 1.9% this year. And the contraction will continue into 2013, while overall GDP stagnates.

In this environment one might have expected inflation to fall sharply, but instead it has proven surprisingly sticky, running at an annual 2.7% in September. This partly reflects VAT hikes and energy and food price rises, although core inflation has also fallen more slowly than might have been expected.

Oxford Economics forecasts inflation to fall towards 1.5% as margins are adjusted down in the face of protracted demand weakness. Should inflation not fall, the squeeze on real incomes would be even larger, compounding the social costs of reforms and thereby raising the threat to the stability of the Eurozone.

-5

-4

-3

-2

-1

0

1

2

3

4

2006 2008 2010 2012 2014

GDPDomestic demand

Eurozone: GDP and domestic demand% year




UK Economy High frequency data continue to point to positive, but weak, underlying growth. Manufacturing activity appears to be drifting slowly downwards on the back of weak export demand, particularly from the Eurozone, though this is offset by continued expansion in activity in the services sector.

The headline series continue to be hindered by the unusual pattern of bank holidays and the impact of hosting the Olympic Games. GDP is likely to have rebounded firmly in Q3, as the effects of the extra bank holiday unwound and the ticket sales and TV rights from hosting the Games provided a further modest boost. However, thereafter the recovery will probably be slow and patchy. Consumer prospects should gradually improve as inflation slows back below target, restoring households’ purchasing power. Stronger contributions from business investment and exports from next year are expected, although this is critically dependent upon the situation in the Eurozone stabilising.

Monetary and fiscal policy are coming under renewed focus. With the current tranche of quantitative easing (QE) due to be completed in early November, the Monetary Policy Committee (MPC) is likely to authorise a further extension. The Chancellor appears unlikely to deviate from ‘Plan A’ when he presents his forthcoming Autumn Statement, but there is some concern that the Office for Budget Responsibility (OBR) may deem the borrowing overshoot to be structural, rather than cyclical, implying that further tightening is required to comply with the fiscal rules.

.

25

30

35

40

45

50

55

60

65

2005 2006 2007 2008 2009 2010 2011 2012

UK: Purchasing managers surveys% balance*

Source : CIPS/Markit

Construction activity

Manufacturingactivity

Services businessactivity

*value over 50 indicates rising activity



US Economy The Federal Reserve has taken decisive action against the current slow pace of growth by committing to open-ended purchases of agency mortgage-backed securities (MBS). These purchases are expected to push investors towards riskier assets, lower the cost of mortgages, and increase consumer confidence, resulting in a slow recovery in residential investment.

The Fed also committed to keeping the Federal Funds Rate low until mid-2015, even if the pace of the recovery improves. This serves as an important signal to the private sector that the Fed will not remove stimulus prematurely. As a result Oxford Economics has increased the GDP forecasts for 2013 to 2.5% and 3.3%, versus 2.3% and 2.8% last month.

In the very near-term, however, the growth outlook remains subdued. Unusually, the national accounts for Q2 were revised for a second time, leading to a 0.4% point reduction in the GDP growth estimate to 1.3%. Data revisions showed consumption and inventories were lower than previously thought.

The unemployment rate fell to 7.8% in September, a strong decline from the previous month. Hiring data – determined separately – remains sluggish, however. The unemployment rate is forecast to average around 8% over 2013.

The outlook for inflation incorporates a continuing high level of labour market slack. Headline consumer price inflation is expected to average 2% in 2012 and 2.1% in 2013. The Fed is expected to respond flexibly to economic conditions as they converge or diverge from its inflation and employment goals. If conditions continue to slow, expect the Fed to increase its bond purchases above the current rate.

-10

-8

-6

-4

-2

0

2

4

6

8

10

2005 2007 2009 2011 2013 2015

Contributions to growthConsumption Government

Fixed priv investment Net exports

Stockbuilding GDP growth

Source: BEA/Oxford Economics

% points

Forecast



Japanese Economy Recent data have raised the spectre of Japan’s economy slipping back into a technical recession. Exports and industrial output are likely to have contracted steeply during Q3, with survey data suggesting few signs of an imminent improvement. Japan’s diplomatic dispute with China may also have a negative near-term impact.

Consumer data have held up better, but is likely to deteriorate as government incentive schemes unwind. Real income growth remains too slow to support a sustained improvement.

On top of these developments, Japan will also have to contend with a significant fiscal tightening over the medium term as a result of the decision earlier this year to double the consumption tax from 5% to 10% by fiscal year 2015.

The headwinds facing the Japanese economy prompted the Bank of Japan (BoJ) to increase its asset purchase programme by ¥10 trillion or around 2% of GDP.

This move should help support growth in 2013-2014, but is not enough to prevent modest forecast downgrades this month. GDP growth is forecast at 1.9% this year and 1.2% next. In this view, Japan’s best hope of boosting growth is to engineer a substantial weakening of the yen – which remains very strong despite the BoJ decision and easing Eurozone tensions.

-20

-15

-10

-5

0

5

10

Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12

Japan: Monthly industrial output% month

Source : METI

Manufacturers'Forecasts



Emerging Market Economies China’s slowdown is continuing, with exports up just 2.3% in August and growth in industrial production slowing to 8.9%, from 9.2% in July. HSBC’s industrial PMI for September was 47.9, little higher than the previous month and still indicating contraction. With investment falling too, it now seems certain that GDP growth in Q3 will fall below the 7.6% rate seen in Q2.

Policymakers have responded gradually so far, implementing a series of monetary measures as well as raising government spending. Earlier this month the authorities approved infrastructure spending worth US$158bn (some of which were already in the pipeline) to be spread over several years. With a change of leadership currently underway further initiatives are not imminently expected. Delays in ensuring local government access to the funding needed to implement these projects, however, would greatly increase the risk of prolonging the period of slower activity. Thus the risk to the forecast for growth of 8.1% in 2013 is on the downside.

The forecasts in several other east Asian countries, including South Korea, Singapore and Indonesia have been edged down, as the soft patch is expected to last longer. Many have scope for more fiscal stimulus, however, if required.

India’s government has announced reforms to tackle high inflation, slowing growth and a rising government budget deficit, and to prevent a potential credit rating downgrade to junk status. But the government’s track record leaves plenty of room for doubt. Wider foreign investment in retail, transport and power will be encouraged to rectify some of the country’s structural deficiencies, and the fuel price subsidy has been cut to control the budget deficit, although this may not be enough to bring the deficit back inside the target of 5.1% of GDP for this fiscal year.

After a 0.2% contraction on the year in Q2, annual industrial output rose just 0.1% in July and is expected to expand by only 0.7% over the year as a whole. PMI data for September were disappointing, too, confirming the expectation that growth will be only 5.6% this year.

0

5

10

15

20

25

30

35

2000 2002 2004 2006 2008 2010 2012

US$bn (seasonally adjusted)

Source: Haver Analytics

China: Exports by destination

EU

US

Japan

-20

-15

-10

-5

0

5

10

15

20

25

2001 2003 2005 2007 2009 2011

% year (3 month average)

Brazil


BRICs: Industrial output

India

Russia

China

-10

-8

-6

-4

-2

0

2

20

30

40

50

60

70

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

% of GDP

F'cast

Source: Oxford Economics / CEIC

Government debt (RHS)

Central government balance (LHS)

India: Government budget balance and debt% of GDP



In Russia, sluggish demand for manufacturing exports is holding back industrial output growth. The domestic economy is proving resilient though, with employment, retail sales and inflation all rising. CPI inflation rose to 6.6% in September and is likely to exceed the 6% year-end target. Personal credit has also expanded over the past year, with outstanding loans in June almost 50% higher than a year earlier, a post-crisis high. These rises prompted the central bank to increase its policy interest rate by 25 basis points to 8.25% last month. Expect one more 25bp rate rise.

September’s manufacturing PMI rose to 49.8, the highest level since March. Seasonally adjusted industrial production jumped 1.5% in August, its largest increase for 18 months, and retail sales volumes rose as consumers are finally reacting to tax breaks and interest rate cuts. These early signs of recovery in Brazil are expected to pick up over the second half of this year as policy stimulus supports an upturn in consumer spending and investment. With a slight rise in inflation, to 5.2% in August, only one more rate cut, of 25bp, is probable. Although GDP growth is likely to be only 1.4% in 2012 due to a weak start to the year, an acceleration to 4.5% in 2013 is expected.

Mexico continues to make the most of its proximity to the US, with the economic activity indicator up 0.7% on the month in July and industrial production up 0.5%. Exports in August were 5.3% higher than a year ago and September’s manufacturing PMI, at 54.4, is in expansionary territory. Nevertheless, private consumption rose at its slowest rate for two years in Q2 and July’s (seasonally adjusted) retail sales volumes grew at their slowest for a year. The growth forecast is unchanged, at 3.5% this year, rising to 3.7% in 2013.

Spreading labour unrest and a ratings downgrade indicate wider problems in South Africa, where the GDP forecast has been cut. Despite a robust domestic economy, exports have been hit by slower world demand, with only 2.4% growth now forecast for this year and 3% for 2013 (compared with 2.5% and 3.2% previously).

-20

-15

-10

-5

0

5

10

15

20

25

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

% year

GDP

Source: Haver Analytics

Russia: GDP

Consumer spending

Exports

Investment

2

4

6

8

10

12

14

16

18

20

2004 2005 2006 2007 2008 2009 2010 2011 2012

% year

Headline CPI


Brazil: CPI measures & Selic interest rate

CPI ex regulated prices& food & drink

Selic interest rate

95

100

105

110

115

120

125

130

2002 2004 2006 2008 2010 2012

2003=100 (seasonally adjusted)


Mexico: GDP proxy (IGAE)

Mexico GDP proxy

US real personal consumption (re-indexed)



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 Central Banks BoE Bank of England BoJ Bank of Japan ECB European Central Bank Fed Federal Reserve (US) RBI Reserve Bank of India

Economic indicators 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. 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 revenue performance. Equal to hotel room revenue / room supply.



ETC Member Organisations

Austria Austrian National Tourist Office (ANTO)

Belgium Flanders: Tourist Office for 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 Presidency of the Council of Ministers, Department for the

Development and Competitiveness of Tourism

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 Ministry of Tourism, Sports, Economic Planning

Serbia National Tourism Organisation of Serbia (TOS)

Slovakia Slovak Tourist Board

Slovenia Slovenian Tourist Board (STB)

Spain Turespaña - Instituto de Turismo de España

Sweden VisitSweden

Switzerland Switzerland Tourism (ST)

Turkey Ministry of Culture and Tourism