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EUROPEAN TOURISM in 2014: TRENDS & PROSPECTS

Quarterly Report (Q3/2014)

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 2014

ETC Market Intelligence Report

Copyright © 2014 European Travel Commission

European Tourism in 2014: Trends & Prospects (Q3/2014)

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 Research/Trends Watch 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: San Marino © San Marino: bilciu

In memoriam Mr. Tom Ylkänen

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

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

mailto:[email protected]

Foreword

European tourism proves robust and resilient

European tourism has continued to grow robustly

throughout 2014 and has proved resilient to

headwinds. Data from the first three quarters of

this year paint a very positive picture for

destinations in Europe, with growth spread across

virtually all reporting destinations (see map on the

right).

Contrary to recent trends, large destinations have

catalysed most tourism growth this year. Spain has

been growing by a strong 9%, on top of nearly 61m

visits reported in 2013. Turkey, Europe’s 4th largest

destination, mirrors this performance with a 7%

increase. Arrivals to Greece are up by 16%, partly

thanks to the recovery of business travel. In the

region, Serbia (+13%), Portugal (+10%), Malta

(+8%), Slovenia (+7%), Croatia (+7%) and Cyprus

(+6%) have also shown healthy growth.

Slovakia (-14%) is the only destination reporting

negative growth, due to unfavourable weather

conditions and the appreciation of the Czech

Koruna.

Arrivals’ growth is mirrored in nights only at several

larger destinations (Spain +12% and Germany

+5%), while most destinations report slower

growth, in line with past trends. In the contingent

situation, with consumers’ spending power on the

rise, slower growth in nights should be interpreted

as a sign of more travel for short breaks on top of

main holidays.

International air passenger traffic confirms this

trend. Year-to-date growth has exceeded 5%,

despite strikes of Europe’s two largerst carriers.

Growth is particularly strong between Europe and

Asia and the Americas, for the latter mainly due to

strong growth in travel from US to Europe.

Inbound travel from Russia by destination

2013, share of each destination’s foreign guests mix.

Source: ETC, TourMIS.

International tourist arrivals by destination

2014 year-to-date, % p.y.

Source: ETC, TourMIS.

Established source markets continue to thrive

Established source markets in Europe remain key to the success of many destinations in the

region. Germany, the European tourism powerhouse, is expeccted to reach all-time records

in outbound travel in 2014. The UK market eventually rebound and delivered its full potential,

with growth in nights outpacing that in arrivals. Positive signals also come from France and

the Netherlands, although consumer sentiment remains weak and travel habits cost-

conscious. Paradoxically, outbound travel from Italy grows strongly in most of Europe,

despite persistent economic recession. This may reflect Italians’ increased propensity to

travel abroad, seeking bargains outside of their national borders.

Unsurprisingly, the Russian market is performing . After a good start in Q1, travel from

Russia fell during Q2 by an estimated 6% as an impact of geopolitical tensions over Crimea.

Year-to-date data point to a recovery of demand in Q3, which shall be interpreted as the

effect of longer travel lead times for main holidays, rather than as an early sign of recovery. If

no changes occur, Russian outbound travel to Europe is expected to still grow in 2014, but

just by a modest 3%. This is 1.2mn short of the volumes predicted for 2014 before the

outbreak (see ETC report “European Tourism amid the Crimea Crisis” on www.etc-

corporate.org).

Overseas markets offset Russia’s weak performance. In the US, declining unemployment

and some increases in wages have increased consumer confidence. Coupled with declining

air fares, Europe’s largest overseas market has performed particularly well in 2014. Growth

from China has staggered, paralleled by 2-digit growth in many third-tier markets, including

India and UAE.

European tourism is in better shape to face headwinds

A balanced guest mix and targeted marketing activities have made European destinations

less vulnerable to market downswings and crises. Despite the abrubt decline in growth from

Russia, Latin American economies in low gear, Japan’s anaemic economy, floods and

natural disasters, and misperceptions about the Ebola threat, European tourism is expected

to grow by 4% in 2014, on top of the sustained growth over the last 4 years. The ETC

outlook for next year remains positive, as we expect ETC members to grow by 2.5% to 3.5%

as an aggregate.

“Targeting a mix of markets with a high growth potential, such as the BRIC markets, and a

high volume potential is an optimal mix to strengthen flows of visitors from overseas”, said

Eduardo Santander, Executive Director of the European Travel Commission. “Spain’s

outstanding growth is the result of a strategy, common to many other destinations in Europe,

that both strengthens ties with established markets and enters new, fast-emerging markets.

Themed, year-round marketing activities also pay dividends, as exemplified by Germany and

Belgium-Flanders”, he continued.

Valeria Croce, ETC Executive Unit

ETC Market Intelligence Group

http://www.etc-corporate.org/?page=report&report_id=62&subject=trends_watch&theme=reports

http://www.etc-corporate.org/?page=report&report_id=62&subject=trends_watch&theme=reports


© European Travel Commission, October 2014

2014 Tourism Performance Summary

With YTD data up to September, we can now begin to get a real flavour of just how well

European tourism is doing in 2014. As the summer months generally account for a much

greater proportion of yearly arrivals and overnights than other months, many countries will make

up for lost ground accruing to the preceding months which tend to be much slower. Just one

reporting country posted falling arrivals according to latest YTD data. Four countries posted a

fall in overnight visits. This compares favourably to pre-summer data which saw two countries

with falling arrivals and five countries with falling overnights representing a strong summer for

European destinations.

This is particularly true of traditional summer holiday destinations such as Croatia for example,

which suffers from highly seasonal travel patterns. It recorded 6.8% growth in visitor arrivals

according to YTD data to August, as well 2.7% in nights over the same period. This is notable

given that both arrivals and overnights to Croatia had fallen based on YTD data to March this

year, summer once again proving to be its saviour.

Spain continues to assert its dominance as a top European destination, with arrivals and

overnights growth of 9.2% and 12% respectively according to data to September. In the Q1

report, Spain was again the top performer and the second top performer in Q2’s report in terms

of overnights growth, highlighting the diversity that exists within Spain as a holiday destination

suitable year-round.

As predicted, arrivals to Iceland have begun to show signs of slowing. Summer demand growth

remains robust, but at a slower rate than at the start of the year when sales in the traditional off

season were being promoted. Yet its strong start to the year has kept it as the strongest grower

with 23.1% growth in arrivals based on data to September. In achieving such growth, Iceland

have highlighted the importance of destination diversity; by making conscious efforts to drive off-

season tourism Iceland has been able to build on a strong start to the year rather than make up

for a weak one.

With data now available for most, if not all summer months in the majority of reporting countries,

a very positive picture emerges; year-to-date (YTD) arrivals growth is observed across all but

one country. Data for overnights visits tells a similar story with YTD growth being reported in all

but four countries with falling arrivals and overnights in Slovakia. This strong growth follows in

the wake of a recovering Eurozone economy and the recovering, if not recovered, economies of

its neighbours. And with a positive macroeconomic outlook for the majority of Europe’s

constituent countries, this growth looks unlikely to waver anytime soon.

-10

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0

5

10

15

20

Icela

nd

Latv

iaG

ree

ce

Serb

iaR

om

ania

Lithuania

Czech R

ep

Irela

nd R

ep

Spain

Malta

Slo

venia

Turk

ey

Cro

atia

Cypru

sB

elg

ium

Germ

any

Pola

nd

Hungary

Esto

nia

Bulg

aria

Monte

negro

Austr

iaS

witzerland

Italy

Slo

va

kia

Foreign visits to select destinations2014, year-to-date*, % change year ago

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

23.1

-13.8 -10

-5

0

5

10

15

20

Spain

Port

ugal

Serb

iaS

weden

Lithuania

Latv

iaD

enm

ark

Czech R

ep

Norw

ay

Germ

any

Belg

ium

Malta

Pola

nd

Slo

venia

Luxem

bourg

Cro

atia

Hungary

Monte

negro

Esto

nia

Sw

itze

rla

nd

Fin

land

Austr

iaItaly

Slo

vakia

Foreign visitor nights in select destinations2014, year-to-date*, % change year ago


-11.2

2 European Tourism in 2014: Trends & Prospects (Q3/2014)


Turkey has impressed with 6.9% arrivals growth based on data to August. In particular, it has

enjoyed a large knock-on benefit from the Russia-Ukraine crisis with arrivals from Russia

growing by 12.9%. As a large source market for Turkey, Russian growth of that magnitude is

marked indeed.

Serbia recorded arrivals and overnight visits growth of 12.9% and 9.3% respectively in the year

to June, largely supported by 17.9% growth in arrivals and 30.8% growth in overnights from

Russia alone. As well as this, it has likely enjoyed some displacement travel otherwise destined

for Croatia only for its new status as a member of the EU.

By contrast, Slovakia continues to falter with both arrivals and overnight visits based on data to

June, falling by 13.8% and 11.2% respectively. As a landlocked country, it is perhaps less likely

than some other European destination to see any notable pickup in arrivals or overnights over

the summer months. However, with July and August still to come as well as the winter months in

which the city break thrives, full year growth may yet be seen.

Country % ytd to month % ytd to month

Austria 1.5 Jan-Aug -1.5 Jan-Aug

Bulgaria 2.5 Jan-Aug

Croatia 6.8 Jan-Aug 2.7 Jan-Aug

Cyprus 5.9 Jan-Aug

Czech Rep 10.0 Jan-Jun 6.8 Jan-Jun

Denmark 7.6 Jan-Aug

Estonia 3.7 Jan-Aug 0.9 Jan-Aug

Finland -1.2 Jan-Jul

Germany 4.7 Jan-Jul 5.4 Jan-Jul

Greece 16.0 Jan-Mar

Hungary 4.0 Jan-Aug 2.2 Jan-Aug

Iceland 23.1 Jan-Sep

Ireland Rep 9.4 Jan-Aug

Italy 1.1 Jan-May -3.7 Jan-May

Latvia 18.9 Jan-Jun 7.9 Jan-Jun

Lithuania 10.2 Jan-Jun 8.6 Jan-Jun

Luxembourg 2.8 Jan-Aug

Malta 8.4 Jan-Aug 4.9 Jan-Aug

Monaco

Montenegro 1.7 Jan-Aug 2.0 Jan-Aug

Netherlands

Norway 6.0 Jan-Aug

Poland 4.6 Jan-Jun 4.0 Jan-Jun

Portugal 9.6 Jan-Jul

Romania 11.0 Jan-Aug

Serbia 12.9 Jan-Aug 9.3 Jan-Aug

Slovakia -13.8 Jan-Jun -11.2 Jan-Jun

Slovenia 7.3 Jan-Jun 3.1 Jan-Jun

Spain 9.2 Jan-Sep 12.0 Jan-Sep

Sweden 9.1 Jan-Aug

Switzerland 1.5 Jan-Aug 0.3 Jan-Aug

Turkey 6.9 Jan-Aug

UK 6.0 Jan-Aug

Source: TourMIS, http://www.tourmis.info; available data as of 10.10.14

Measures used for nights and arrivals vary by country

See TourMIS for further data including absolute values.

Tourist Arrivals and Nights

2014 Performance, Year to Date

International Arrivals International Nights


© European Travel Commission October 2014

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 with 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 2015data/estimate/forecast *** d d e f f d d e f f

World 4.9% 4.0% 4.9% 4.1% 4.9% 3.5% 3.8% 4.8% 4.1% 5.6%

Americas 4.3% 4.5% 3.4% 6.1% 4.7% 3.6% 5.9% 2.7% 5.0% 4.8%

North America 2.9% 4.3% 3.9% 6.7% 4.9% 0.4% 5.3% 2.2% 5.4% 5.3%

Caribbean 2.2% 3.4% 2.2% 4.6% 4.1% -5.0% -1.7% -1.5% 5.1% 5.1%

Central & South America 10.4% 5.6% 2.6% 5.4% 4.7% 17.8% 9.4% 5.1% 3.7% 3.1%

Europe 6.5% 3.3% 6.1% 3.5% 3.9% 4.3% 3.6% 4.1% 3.2% 4.5%

ETC+3 5.8% 2.2% 5.8% 4.3% 3.6% 2.2% 1.6% 2.4% 4.0% 4.8%

EU 5.5% 2.3% 5.4% 3.7% 3.2% 2.0% 1.2% 2.2% 4.1% 5.0%

Non-EU 10.1% 6.9% 8.5% 2.7% 6.4% 12.6% 11.7% 9.5% 0.9% 3.2%

Northern 2.5% 0.2% 4.9% 4.9% 3.7% 4.3% 2.9% 4.3% 4.6% 4.4%

Western 4.6% 3.2% 5.2% 2.2% 2.6% 3.6% 3.2% 2.4% 4.9% 5.2%

Southern/Mediterranean 7.7% 1.6% 6.5% 6.3% 4.0% 2.4% -2.8% 0.6% 3.1% 3.0%

Central/Eastern 9.7% 7.3% 7.1% -0.1% 4.8% 5.9% 6.4% 7.3% 0.5% 4.6%

- Central & Baltic 6.9% 4.2% 5.7% 3.1% 4.5% -4.1% 2.2% 2.6% 2.0% 6.5%

Asia & the Pacific 6.4% 6.7% 6.2% 4.7% 6.7% 7.3% 7.4% 7.7% 5.1% 6.9%

North East 3.8% 6.0% 3.5% 6.1% 7.6% 7.7% 8.4% 8.6% 5.4% 6.5%

South East 10.2% 8.9% 10.5% 2.2% 6.2% 5.2% 5.7% 6.9% 2.7% 8.2%

South 14.1% 3.7% 6.6% 8.1% 5.1% 11.0% 4.1% 3.1% 10.2% 6.4%

Oceania 2.7% 2.4% 4.1% 4.9% 2.9% 7.1% 4.9% 5.2% 4.6% 6.0%

Africa -7.7% 8.2% -1.1% 2.1% 5.3% 4.8% 6.7% 1.0% 3.3% 5.0%

Mid East 1.1% -6.0% 0.3% 4.9% 7.4% -11.2% -11.4% 2.8% 4.8% 9.0%

* 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

Note: world inbound and outbound do not match exactly in historic data or forecast. This is due to visits to multiple destinations.

For example, one outbound trip may be to more than one destination. Some sample error may also be evident in historic data.

*** d - data reported by national statistical agencies are available for all years to 2012

e - 2013 estimated using all available year-to-date data, and forecasts for the rest of the year

f - forecasts according to Tourism Economics' global economic and tourism forecast models

ETC+3 = ETC members plus France, Netherlands, and UK

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

TDM Visitor Growth Forecasts, % change

Outbound**Inbound*



Recent Industry Performance

Growth continues, overcoming some hurdles along the way…

European international air transport growth remains strong in 2014

More industry strikes have some negative impact, but an otherwise strong year

for air travel growth

Travel growth between Europe and long haul markets continues to outpace total

European air passenger traffic growth

European hotel occupancy and room rates have grown in 2014 to date with the

best overall performance of any World region, despite falls in Eastern Europe

Air Transport

Global air passenger demand continues to grow across all

regions on a monthly and year-to-date basis. The month of

May saw particularly strong growth across all regions though

YTD growth in Africa is weaker than it has been in recent

history, likely due to the ongoing Ebola threat. With the

spending power of many still feeling the pinch of the global

crash, this strong growth is perhaps an indicator of a

growing propensity amongst consumers to travel outside of

the more expensive summer months.

The stand out region is the Middle East, which grew faster

than all other regions in each of the four most recent months

of data. While not a “peace dividend” per se, this strong

growth may be attributed to the cooling down of conflict in

the region, also evident in some improvement in Africa.

Growth is also a continuation of performance in recent years

with continued development of major hubs and destinations

in the region.

North America was the weakest performer based on the last

four months of data, however, each month still grew

moderately at an average rate of 3.4%. Such growth for this

region is notable given its maturity and stability and year-to-

date performance is faster than in the prior two years.

0

5

10

15

Africa Asia/Pacific Europe LatinAmerica

Mid.East N.America World

May-14 Jun-14 Jul-14 Aug-14

% year

Source: IATA

Monthly international air passenger growth

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-9

-6

-3

0

3

6

9

12

15

18

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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 World0

5

10

15

20 2012 2013 2014 ytd

% year, RPK

Source: IATA

Annual international air passenger growth



Data from the Association of European Airlines (AEA) shows a sudden and sharp fall in European

airline capacity as we move into Q4. This steep fall in capacity growth coincides with strike action

taken by employees of Air France and Lufthansa – Europe’s two biggest carriers – in September,

shrinking by 5.2% and 5.1% in each of the two weeks which saw strike action compared to the

same weeks in 2013. With some 50-60% of its services grounded in the first few days of the 14 day

strike, Air-France-KLM group are expected to have lost in excess of 20% of their full year core

profits. There have been other strikes by the industry earlier in the year, however only the three day

Lufthansa strike in early April has a comparable impact, albeit much smaller, with availabale seat

kilometers (ASK) falling by 2.2% in that week compared to the same week in 2013.

Passenger load factor (PLF) was affected by the strikes, but by a much lesser extent. A fall can be

observed for mid-September data, to rates similar to in 2012 rather than the higher utilisation rates

enjoyed for much of the summer. However, in the first week of strike action load factor was 2.9

percentage points higher than the same week in 2013 at 82.3%, and demand remains high.

On the whole, air passenger traffic between Europe and Asia and the Americas continues to grow

at a faster rate than total travel to and from Europe in 2014 data to date, in some part due to

recovering European economies. United States outbound travel to Europe has been particularly

strong this year and is a driving force of this growth. The FIFA World Cup in Brazil may also have

driven some transatlantic travel by Europeansin June and July.

Travel between Europe and Asia has also grown at a faster rate that total European airline

passenger growth, largely driven by emerging Asia economies and their growing ability to travel

long haul in line with economic trends in the region.

60

65

70

75

80

85

90

Q1 Q2 Q3 Q4

2012 2013 2014

Weekly load factor, %

Source: AEA

European airlines passenger load factor

-5

0

5

10

Q1 Q2 Q3 Q4

2012 2013 2014

ASK, 4 week moving average, % change year ago

Source: AEA

European airlines capacity

-2

0

2

4

6

8

10

12

14

201

2Q

1

201

2Q

2

201

2Q

3

201

2Q

4

201

3Q

1

201

3Q

2

201

3Q

3

201

3Q

4

201

4Q

1

201

4Q

2

201

4Q

3

Asia Total

RPK, 4 week moving average, % change year ago

RPK = revenue passenger kmsSource: AEA

European airline passenger traffic: Asia

-4

-2

0

2

4

6

8

10

12

201

2Q

1

201

2Q

2

201

2Q

3

201

2Q

4

201

3Q

1

201

3Q

2

201

3Q

3

201

3Q

4

201

4Q

1

201

4Q

2

201

4Q

3

201

4Q

4

Americas Total

RPK, 4 week moving average, % change year ago

RPK = revenue passenger kmsSource: AEA

European airline passenger traffic: Americas



Accommodation Occupancy rates have grown in all world regions according to the latest YTD figures to September

from STR Global. Americas and the Middle East are the two fastest growing regions with 3.3% and

3.6% growth compared to the same period last year. Europe and Asia/Pacific grew at a rate of

2.1% and 0.8% respectively.

Europe saw some relatively rapid growth in average daily room rate (ADR) of 3.7%, with notable

improvement over the summer, as industry confidence is on the up. Total regional hotel

performance, measured as revenue per available room (RevPAR), has improved as a

consequence to grow at 5.9% in euro terms. Growth was 5.2% in the year to May, while ADR

growth was 2.5% before the improvements over the summer months.

In the Americas ADR grew by just 1.8% for the year to date. This included a notable positive

contribution from South America as prices in Brazil were hiked during the FIFA World Cup which

straddled the months of June and July. However occupancy rates in South America have fallen,

reflecting the weaker economic conditions within the region as the year has progressed.

In Asia Pacific slowing demand growth and low confidence has translated to a fall in ADR with the

observed growth in occupancy rates not sufficient to offset a negative impact on RevPAR. But this

is also linked to currency movements within the region which make the value of room rates lower

when denominated in US dollar or Euro terms, with changes measured in local currencies much

less dramatic. This also highlights the reduced affordability of travel to Europe from these markets.

Occupancy rate growth in the Middle East and Africa remained sufficient to ensure RevPAR growth

compared to the same period last year. Some notable falls in both Occupancy and ADR are

evident for Southern Africa, potentially linked to the Ebola threat; the subject of major publicity in

recent months.

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5

10

15

20

Esto

nia

Turk

ey

Denm

ark

Malta

Port

ugal

Lithuania

Cze

ch R

ep

ub

lic

Ru

ssia

Irela

nd

Hu

ng

ary

United

Kin

gd

om

Spa

in

Gre

ece

Neth

erl

and

s

Belg

ium

Sw

itzerla

nd

Italy

Pola

nd

Germ

any

Austr

ia

Rom

an

ia

Fin

lan

d

Fra

nce

Slo

vakia

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

Source : STR Global

Asia/Pacific Americas Europe MiddleEast/Africa

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-2

0

2

4

6

8

10 Occ ADR* RevPAR*

Global Hotel Performance, Jan-Sep 2014

% change year ago

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



Key Source Market Performance

A bumper year for European travel…

Intra-European travel demand continues to thrive

Strong economies catalyse travel and tourism growth

Travel from Russia is impacted by the crisis involving it and Ukraine, but

continues to grow

Robust travel growth from long-haul markets, notably the US, maintains

pace

Key intra-European markets

Germany still supports growth in some of the traditional and subsequently larger European destination markets, such as Spain and Turkey. These two countries typically enjoy a large share of German outbound to European markets with each welcoming 9.9m and 4.8m German visitors. But the likes of Italy, which received 9.5m arrivals from Germany in 2013, should be concerned with even the smallest of percentage falls in arrivals representing a reasonably large fall in absolute terms. With data now available to July, Latvia continues to be a key recipient of German visits enjoying 43.6% and 34.3% YTD growth in visits and overnights respectively. This growth has been supported by low-cost airline, Wizz Air’s addition of two new routes between Latvia and Germany, now flying twice weekly to Dortmund and Hamburg. Lithuania has also enjoyed strong arrivals and overnights growth from Germany, particularly the former which grew by 14.3% based on data to July. However, with only 172,000 visits from Germany in 2013, this says little about any notable trends from Germany. Cyprus suffered a marked fall in arrivals from Germany to the tune of 19.7%, consistent with a longer run trend, however the summer months have mitigated these losses somewhat; YTD to May had arrivals to Cyprus from Germany falling by 27.7%, and with one more summer month yet to be released, there could be further reprieve on the horizon. Visits and overnights to Slovakia have also fallen out of favour with the German traveller, by 11.0% and 12.5% respectively. And as one of Europe’s larger source markets, this goes a large way towards explaining Slovakia’s sub-par performance.

Trends discussed in this section are for up to the first nine months of the year, although actual

coverage varies by destination; for the majority of countries July or August will be the latest

available data point. Note also that YTD trends are not fully indicative of full year performance as

some markets more than others rely heavily on performance in the June-August period.

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

from TourMIS, http://tourmis.info.

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Latv

iaL

ith

ua

nia

Cze

ch R

ep

Icela

nd

Esto

nia

Se

rbia

Bu

lgaria

Spain

Po

land

UK

Slo

ve

nia

Be

lgiu

mC

roatia

Ro

ma

nia

Tu

rke

yH

un

ga

ryM

onte

ne

gro

Au

str

iaG

ree

ce

Sw

itzerland

Ma

lta

Italy

Slo

va

kia

Cyp

rus

Visits from Germany to select destinations2014, year-to-date*, % change year ago


43.6

-20

-15

-10

-5

0

5

10

15

20

Latv

iaL

ith

ua

nia

Cze

ch R

ep

Icela

nd

Esto

nia

Se

rbia

Bu

lgaria

Sp

ain

Po

land

UK

Slo

ve

nia

Be

lgiu

mC

roatia

Ro

ma

nia

Tu

rke

yH

un

ga

ryM

onte

ne

gro

Au

str

iaG

ree

ce

Sw

itze

rla

nd

Ma

lta

Italy

Slo

va

kia

Cyp

rus

Visits from Germany to select destinations2014, year-to-date*, % change year ago


43.6

-20

-15

-10

-5

0

5

10

15

20

Latv

iaS

pa

inS

erb

iaS

wed

en

Cze

ch R

ep

Esto

nia

Lith

ua

nia

Slo

ve

nia

De

nm

ark

No

rwa

yP

ort

ug

al

Be

lgiu

mP

ola

nd

Luxe

mb

ourg

Cro

atia

Hu

ng

ary

Mo

nte

ne

gro

Fin

lan

dA

ustr

iaS

witzerland

Malta

Italy

Slo

va

kia

German visitor nights in select destinations2014, year-to-date*, % change year ago


34.3



With an underlying macroeconomic weakness, it is positive to see growth from the

Netherlands across a large number of European markets; more countries are now

reporting growth in travel from Netherlands than earlier in the year. Greece in particular

has reported strong growth in arrivals from the Netherlands, although this figure (110%) is

based on data to March so will not be indicative of full year performance.

Some of Europe’s larger more traditional destination markets continue to appeal, with

Spain and Italy both enjoying in excess of 5% YTD growth in arrivals. Spain also saw

nights from the Netherlands grow by a similar rate, indicating no change in the average

length of stay. Italy on the other hand, however, saw overnights spent by Dutch visitors

fall by 1.5%.

Outbound travel from France shows signs of a rebound following a relatively weak

performance in recent years, providing a steady flow of visitors and overnights to a large

number of European destinations. Latvia has seen the highest level of growth from

France in both visits and overnights terms, by 30% and 20.3% respectively. Serbia also

features high on the list of top destination markets for French visitors in 2014 with 16.5%

and 18.2% respective growth in visits and overnights. Malta, Montenegro, and Slovenia

has also enjoyed strong growth from France this year.

In September, Air France-KLM group workers exercised strike action over a 14 day

period, grounding a large number of flights, particularly within the first few days. We

should see a large shock as a result of this action, however, because Spain is the only

country currently reporting YTD data to September, the extent of this shock is hard to

quantify at present, but we would expect to see weaker growth for the year as a whole.



Central & Eastern European destinations dominate the top spots for growth from many of

Europe’s larger source markets, including Italy. Improving air links between these

countries and Western Europe, particularly those links delivered by low-cost carriers,

have a lot to do with this strong growth, while such destinations remain relatively less

expensive than other European destinations and many European travellers remain cost

conscious.

The United Kingdom and Spain maintain their appeal amongst these relatively new

destination markets, seeing 14% and 13% YTD to August and September respectively.

With arrivals from Italy of 1.7m and 3.3m respectively in 2013, growth to these markets is

particularly impressive.

The preferred destinations of the British visitor appear to be unwavering. Strong growth

was recorded in many of its more traditional destination markets such as Greece, Italy,

Spain, and Portugal, collectively receiving 39% of all UK outbound to Europe and 29% of

all UK outbound in 2013. British visits to Greece is perhaps the most striking at 58.7%,

however, note that this is based on the first three months of 2014 only. Italy enjoyed

British visitor nights growth of 15.9%, Spain saw growth of 15.6%, and Portugal 11.2%. In

these three countries, the fact that overnights growth is outpacing arrivals growth

suggests a growing ability amongst the British tourist to holiday for longer. And given that

Spain alone takes 27% of all UK outbound to Europe, such growth from Britain is

particularly noteworthy.

This strong growth is consistent with the expected pickup in the British economy as well

as with movements in the value of Sterling.



Unsurprisingly, the majority of reporting destinations have recoded falling arrivals and

overnights from Russia, largely surrounding the ill-sentiment and sanctions imposed by

some members of the EU serving as a deterrent to Russian visitors.

Greece stands out again, however this is based on the first three months of 2014 only as

can considered the rebound from a marked period of falling arrivals generally following

the Greek government’s default and the ensuing economic difficulties.

The UK has seen strong growth from Russia in arrivals terms to the tune of 25%. Such

strong growth is particularly impressive given the relative weakness of the Russian rouble

which would normally result in falling arrivals to economies with a stable currency such as

the UK. Arrivals from Russia have also grown in Cyprus, Serbia, and Turkey, all of whom

have long standing relationships. Each enjoyed 16.9%, 17.9%, and 12.9% in respective

arrivals growth.

As the powerhouse of the EU, it is not unexpected to see Germany posting falling arrivals

and overnight visits from Russia. Given this status, the bulk of ill sentiment surround the

EU’s sanctions were likely to fall heavily on Germany. It seems also that Romania has

suffered at the hands of the Russia-Ukraine crisis with overnight visits from Russia falling

by 11.8% based on data to August, Russia’s likely favouring Ukraine/Crimea’s Black Sea

coast to Romania’s, perhaps as an act of nationalism.



Non-European markets Latest data indicate that travel to Europe from the US was positive in most reporting

destinations. Economic growth in the US is strengthening according to the latest data and

we anticipate acceleration in GDP in 2014 as a whole. This will include acceleration in

consumer spending on the back of jobs and wage growth. There remains scope for

further acceleration in outbound travel growth over the remainder of the year and

particularly in terms of long haul travel in an encouraging sign for European tourism. US

outbound is expected to regain, and even exceed, previous peak levels achieved in 2007.

This is also true for long-haul travel demand.

Lithuania has enjoyed particularly strong growth from the US in terms of nights, growing

56.6% based on data to June. However, unlike some more southerly countries, the

northerly location of Lithuania means this will likely slow as the months progress, tourists

instead favouring the warmer climes of Mediterranean Europe. The same is also true for

Norway. Spain, however, with data to September reporting a 9.5% fall in visits from the

US, will likely be disappointed having not made the most of the summer months.

Visits and overnights from Japan suggest that the export-led policies of the Bank of Japan

have not affected travel behaviour as much as initially feared, despite lower spending power

in international markets from the weaker Yen. Many European countries continue to report

growth in arrivals, although a majority report lower arrivals and a large minority lower report

overnights.

Strong growth in Greece, Montenegro, and Estonia would however suggest that those

relatively cheaper destinations within Europe have stood to gain from the weaker Yen, while

growth in the more traditional European destinations such as Spain and Italy is also evident.



Outbound travel from China has been strong so far in 2014 in terms of both visitor arrivals

and visitor nights, the vast majority in double digit territory. We should expect to see a

continuation of growth in outbound travel, and ahead of general GDP growth. Travel to

Europe as a whole is expected to grow by over 15% in 2014 as a whole for the fifth

consecutive year; arrivals will be more than 2.5 time larger than in 2009. The Chinese

economy remains stable and with an increasing number of middle-class households, now

more able to afford travel. However, given the relatively small volumes, travel from China

to Europe should not be overvalued, accounting for just 1.3% of European arrivals in

2013.

Arrivals growth from India is positive with the majority of European destinations reporting

strong levels of growth. In particular, Croatia saw arrivals rise by 89.1% in the year-to-

date with 94.1% growth in overnights, while Bulgaria saw arrivals grow by 59.5%.

Indian arrivals still represent a relatively small proportion of total European arrivals and

some volatility should be expected, but with limited impact on overall destination

performance. In the longer-term growth prospects remain strong with potential economic

reform.



Some strong growth remains from Canada following on from high growth figures reported

earlier in the year. Lithuania features as the strongest grower yet again with 92.2% growth in

arrival but the volumes from Canada are likely to be very small. Iceland has also held up well,

managing to sustain strong growth since the beginning of the year, now 66.7% based on data

to September.



Origin Market Share Analysis

United States

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. 2014 values are year-to-date estimates based on the latest available data and are not

final reported numbers.

Methodology note:

Data in these charts and tables relate to reported arrivals

in all destinations as a comparable measure of outbound

travel for calculation of market share.

Hence, US outbound shown here is larger than reported

departures in national statistics as long-haul trips often

involve travel to multiple destinations. For example, in

2013 US data reporting shows 11.4m departures to

Europe while the sum of European arrivals from the US

was 22m; each US trip to Europe involved a visit to two

destinations on average.

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-

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

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009

Total outbound travel (000s) 87,549 - 4.5% 24.6% - 18.4% -

of which:

Long haul (000s) 54,476 62.2% 5.0% 27.7% 63.8% 23.7% 59.5%

Short haul (000s) 33,073 37.8% 3.6% 19.3% 36.2% 10.5% 40.5%

Travel to Europe***

Europe (000s) 23,457 26.8% 4.2% 22.7% 26.4% 24.4% 25.5%

Northern Europe (000s) 5,264 6.0% 5.5% 30.8% 6.3% 13.5% 6.3%

Western Europe (000s) 8,860 10.1% 3.1% 16.4% 9.5% 24.8% 9.6%

Southern Europe (000s) 6,063 6.9% 3.2% 17.1% 6.5% 26.0% 6.5%

Central/Eastern Europe (000s) 3,270 3.7% 6.5% 36.7% 4.1% 41.5% 3.1%

** Shows cumulative change over the relevant time period indicated

US Market Share Summary

2014 Growth (2014-19) Growth (2009-14)

* Levels are in 000s unless otherwise specified

*** Shares are expressed as a % of total outbound travel

0

10

20

30

40

50

60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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

04

20

05

20

06

20

07

20

08

20

09

20

10

2011

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Europe's share of US marketNorthern Europe

Western Europe

Southern Europe


% of long haul* market





Canada




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 11,341 31.8% 5.5% 30.9% 32.7% 17.1% 34.2%

Short haul (000s) 24,367 68.2% 4.6% 25.3% 67.3% 31.1% 65.8%

Travel to Europe***

Europe (000s) 4,337 12.1% 4.1% 22.4% 11.7% 16.5% 13.2%

Northern Europe (000s) 866 2.4% 8.3% 48.9% 2.8% -2.9% 3.2%

Western Europe (000s) 1,650 4.6% 2.2% 11.6% 4.1% 15.8% 5.0%


Central/Eastern Europe (000s) 207 0.6% 9.3% 55.9% 0.7% -8.6% 0.8%


2014 Growth (2014-19) Growth (2009-14)

Canada Market Share Summary



0

2

4

6

8

10

12

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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

4

2005

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

2014

201

5

201

6

201

7

201

8

201

9

Europe's share of Canadian market Northern Europe

Western Europe

Southern Europe







Mexico




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 2,243 11.7% 6.0% 33.9% 12.4% 35.5% 11.0%

Short haul (000s) 16,958 88.3% 4.6% 25.2% 87.6% 26.6% 89.0%

Travel to Europe***

Europe (000s) 1,206 6.3% 3.8% 20.2% 6.0% 33.8% 6.0%

Northern Europe (000s) 119 0.6% 6.7% 38.3% 0.7% 42.9% 0.6%

Western Europe (000s) 565 2.9% 4.3% 23.6% 2.9% 30.4% 2.9%

Southern Europe (000s) 412 2.1% 1.0% 5.3% 1.8% 27.5% 2.1%

Central/Eastern Europe (000s) 110 0.6% 6.8% 38.8% 0.6% 78.8% 0.4%




Mexico Market Share Summary

2014 Growth (2014-19) Growth (2009-14)

0.0

0.5

1.0

1.5

2.0

2.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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

4

200

5

200

6

200

7

200

8

200

9

201

0

2011

201

2

2013

201

4

201

5

201

6

201

7

201

8

201

9

Europe's share of Mexican marketNorthern Europe

Western Europe

Southern Europe







Argentina




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 2,281 29.6% 4.6% 25.2% 29.9% 59.3% 27.1%

Short haul (000s) 5,430 70.4% 4.3% 23.4% 70.1% 40.8% 72.9%

Travel to Europe***

Europe (000s) 843 10.9% 4.7% 25.7% 11.1% 45.9% 10.9%


Western Europe (000s) 50 0.6% 5.5% 30.9% 0.7% 86.3% 0.5%




2014 Growth (2014-19) Growth (2009-14)



Argentina Market Share Summary

0.0

0.5

1.0

1.5

2.0

2.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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%

200

4

200

5

200

6

200

7

200

8

200

9

201

0

2011

201

2

2013

201

4

201

5

201

6

201

7

201

8

201

9

Europe's share of Argentinean market

Northern Europe

Western Europe

Southern Europe







Brazil




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 7,242 72.1% 5.1% 28.0% 72.6% 110.5% 68.5%

Short haul (000s) 2,807 27.9% 4.5% 24.7% 27.4% 77.1% 31.5%

Travel to Europe***

Europe (000s) 3,741 37.2% 1.6% 8.0% 31.6% 98.7% 37.5%


Western Europe (000s) 1,809 18.0% 0.9% 4.3% 14.8% 113.3% 16.9%

Southern Europe (000s) 1,334 13.3% -0.4% -2.2% 10.2% 80.4% 14.7%



2014 Growth (2014-19) Growth (2009-14)


Brazil Market Share Summary


0

1

2

3

4

5

6

7

8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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

4

200

5

200

6

200

7

200

8

200

9

201

0

2011

201

2

2013

201

4

201

5

201

6

201

7

201

8

201

9

Europe's share of Brazilian marketNorthern Europe

Western Europe

Southern Europe







India




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 11,703 94.5% 6.5% 36.9% 94.4% 56.3% 96.3%

Short haul (000s) 680 5.5% 6.8% 38.7% 5.6% 137.9% 3.7%

Travel to Europe***

Europe (000s) 1,971 15.9% 5.2% 28.7% 15.0% 61.6% 15.7%


Western Europe (000s) 707 5.7% 5.5% 30.7% 5.4% 62.2% 5.6%





2014 Growth (2014-19) Growth (2009-14)

India Market Share Summary


0

2

4

6

8

10

12

14

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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

4

200

5

2006

200

7

200

8

200

9

201

0

201

1

201

2

2013

201

4

201

5

201

6

201

7

201

8

201

9

Europe's share of Indian marketNorthern Europe

Western Europe

Southern Europe



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




China




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 26,641 41.1% 6.1% 34.3% 42.9% 190.9% 33.1%

Short haul (000s) 38,165 58.9% 4.5% 24.9% 57.1% 106.3% 66.9%

Travel to Europe***

Europe (000s) 8,845 13.6% 6.2% 35.0% 14.3% 167.6% 12.0%


Western Europe (000s) 4,863 7.5% 5.2% 28.7% 7.5% 215.4% 5.6%





China Market Share Summary

2014 Growth (2014-19) Growth (2009-14)


0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Europe's share of Chinese marketNorthern Europe

Western Europe

Southern Europe







Japan




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 14,127 61.2% 4.5% 24.6% 59.7% 23.9% 57.0%

Short haul (000s) 8,974 38.8% 5.8% 32.5% 40.3% 4.3% 43.0%

Travel to Europe***

Europe (000s) 4,673 20.2% 3.3% 17.7% 18.6% 20.9% 19.3%


Western Europe (000s) 2,285 9.9% 2.8% 14.9% 8.9% 19.7% 9.5%





Japan Market Share Summary

2014 Growth (2014-19) Growth (2009-14)


0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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%

200

4

200

5

2006

200

7

200

8

200

9

201

0

201

1

201

2

2013

201

4

201

5

201

6

201

7

201

8

201

9

Europe's share of Japanese marketNorthern Europe

Western Europe

Southern Europe







United Arab Emirates




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009

Total outbound travel (000s) 2,460 - 4.8% 26.5% - -27.2% -

of which:

Long haul (000s) 1,199 48.7% 3.1% 16.2% 44.8% 14.8% 30.9%

Short haul (000s) 1,261 51.3% 6.4% 36.3% 55.2% -46.0% 69.1%

Travel to Europe***

Europe (000s) 709 28.8% 1.8% 9.4% 24.9% 17.9% 17.8%

Northern Europe (000s) 259 10.5% -0.6% -3.0% 8.1% 4.8% 7.3%

Western Europe (000s) 284 11.5% 2.3% 12.2% 10.2% 23.0% 6.8%





2014 Growth (2014-19) Growth (2009-14)


United Arab Emirates Market Share Summary

0.0

0.5

1.0

1.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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%

200

4

200

5

200

6

200

7

200

8

200

9

201

0

2011

201

2

2013

201

4

201

5

201

6

201

7

201

8

201

9

Europe's share of Emirati marketNorthern Europe

Western Europe

Southern Europe



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




Russia

Given the sanctions being imposed upon Russia,

and the associated ill-sentiment felt by Russians

towards those countries imposing them, we expect

the level of Russian arrivals to ETC destinations plus

France, Netherlands and UK (ETC+3) to be 20.6m in

2016 – 1.8m lower in than our pre-crisis forecast of

22.5m.

In the event of further escalation leading to a full-

scale conflict, we would estimate arrivals from

Russia to ETC+3 to fall to be 9.2m lower than the

pre-crisis estimates at just 13.3m. However, there

remains great uncertainty as to how this crisis will

unfold, and hence larger than usual uncertainty

surrounding any forecasts.




Norway, Sweden, UK









Slovakia, Ukraine

Level* ShareAnnual

average

Cumulative

growth**

Share

2019

Cumulative

growth**

Share

2009


of which:

Long haul (000s) 8,316 19.8% 7.0% 40.3% 23.0% 82.1% 21.8%

Short haul (000s) 33,744 80.2% 2.9% 15.6% 77.0% 105.4% 78.2%

Travel to Europe***

Europe (000s) 33,744 80.2% 2.9% 15.6% 77.0% 105.4% 78.2%

Northern Europe (000s) 1,626 3.9% 4.2% 23.1% 4.0% 63.9% 4.7%

Western Europe (000s) 2,329 5.5% 2.6% 13.9% 5.2% 120.1% 5.0%




2014 Growth (2014-19) Growth (2009-14)



Russia Market Share Summary

0

5

10

15

20

25

30

35

40

45

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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

4

200

5

2006

200

7

200

8

200

9

2010

201

1

201

2

201

3

2014

201

5

201

6

201

7

201

8

201

9

Europe's share of Russian marketNorthern Europe

Western Europe

Southern Europe


% of outbound* market

*Outbound market defined as tourist arrivals to all destinations




GDP

Consumer

expenditure

Unemploy-

ment **

Exchange

rate*** Inflation GDP

Consumer

expenditure

Unemploy-

ment **

Exchange

rate*** Inflation

UK 1.7% 1.6% -0.5% -4.5% 2.6% UK 3.1% 2.2% -1.2% 5.7% 1.7%

France 0.4% 0.3% 0.5% 0.0% 0.9% France 0.4% 0.2% -0.1% 0.0% 0.6%

Germany 0.2% 1.0% 0.0% 0.0% 1.5% Germany 1.4% 1.1% -0.2% 0.0% 1.0%

Netherlands -0.7% -1.6% 1.8% 0.0% 2.5% Netherlands 0.8% -0.1% 0.2% 0.0% 1.1%

Italy -1.8% -2.6% 1.5% 0.0% 1.2% Italy -0.3% 0.1% 0.3% 0.0% 0.3%

Russia 1.2% 4.7% 0.0% -5.6% 6.8% Russia 0.5% 0.4% -0.2% -12.0% 7.5%

US 2.2% 2.4% -0.7% -3.4% 1.5% US 2.2% 2.3% -1.1% -0.3% 1.8%

Canada 2.0% 2.4% -0.2% -6.2% 1.0% Canada 2.1% 2.6% -0.1% -6.8% 1.9%

Brazil 2.5% 2.6% -0.1% -12.5% 6.2% Brazil 0.0% 1.2% -0.3% -6.9% 6.3%

China 7.7% 8.5% 0.0% -0.7% 2.6% China 7.4% 8.4% 0.0% -0.5% 2.3%

Japan 1.5% 2.0% -0.3% -20.8% 0.4% Japan 0.7% -0.7% -0.4% -6.8% 2.8%

India 4.7% 4.0% 0.0% -11.8% 10.1% India 5.3% 6.0% 0.0% -4.0% 8.0%

* unless otherwise specified

** percentage point change

Note: Colour coding relates to each individual column and highlights the strongest performing countries shaded as dark green (e.g. China fastest growing GDP), and

weakest performaing countries as dark red (e.g. falling consumer expenditure in Netherlands and Italy).

Summary of economic outlook: 2013% growth y-y*

Macroeconomic indicators

Summary of economic outlook: 2014% growth y-y*

Macroeconomic indicators

*** exchange rates measured against the euro. A positive change indicates stronger local currency against the euro and therefore a positive impact on outbound

tourism demand. A negative change indicates weaker local currency against the euro and therefore a negative impact on outbound tourism demand.

Economic outlook summary: key source markets

Eurozone GDP growth is forecast to grow in 2014 across all key markets with the exception of

Italy, yet consumer expenditure is expected to grow, albeit by a very small amount. Overall this will

likely translate into some higher levels of leisure and business travel

Performance by some key Eurozone economies remains sluggish, particularly the Netherlands

where consumer expenditure growth is still in negative territory, however it is moving in the right

direction compared to 2013

The UK’s recovery is in full flow with strong growth across all key macro indicators, particularly GDP

and consumer expenditure, up 3.1% and 2.2% on 2013, respectively

Russian growth has slowed substantially in 2014 and Oxford Economics’ latest outlook is for a

recession during the year. This is partly linked to the large devaluation at the start of the year

(down 12% against the euro for 2014 as a whole) and risks related to capital flight in emerging

markets, while a falling oil price will also affect government revenue and spending. Political

tensions, including sanctions will further affect investment attractiveness

Chinese growth is also expected to slow marginally in 2014, although it remains the strongest

growing source markets in terms of GDP and consumer expenditure, the latter arguably being the

more pertinent to outbound travel and tourism growth. China remains a small source market for

Europe, however strong travel growth from China nonetheless provides a modest contribution to

overall growth

Strong GDP and consumer expenditure growth in India will pave the way for outbound travel

growth

Assessing recent tourism data and industry performance is a useful way of directly monitoring the

key trends for travel demand across Europe. This can be complemented by looking at key trends

and relationships in macroeconomic performance in Europe’s key source markets which can

provide further useful insight into likely tourism developments throughout the year.

The linkages between macro and tourism performance can be very informative. For example,

strong GDP or consumer spending growth is an indication of rising prosperity with people more

likely to avail of international travel. It is also an indication of rising business activity and therefore

stronger business travel. Movements in exchange rates against the euro can be equally important

as it can influence choice of destination.



-100

-80

-60

-40

-20

0

20

40

60

80

100

Jan-12 Oct-12 Jul-13 Apr-14

World: Citigroup Economic Surprise Indices% balance of positive/negative surprises in economic data releases

Source : Oxford Economics/Haver Analytics

US

G10

80

85

90

95

80

90

100

110

120

130

140

2012 2013 2014

World: Oil prices and the dollarUS$/barrel


Oil price (LHS)Trade-weighted dollar (RHS)

Index, 2000=100

Overview: Global cycle still short of momentum

The global upswing still looks lackluster. Indeed, for

some parts of the world indicators of growth suggest

recessionary or near-recessionary conditions.

In the Eurozone, the PMI and IFO surveys have

continued to deteriorate and weaker consumer

confidence threatens the sustainability of the recent

improvement in household spending.

In Japan, Q3 GDP growth is likely to be very weak

as the economy continues to gasp for air after

April’s sales tax hike. We have revised down our

growth forecasts to 0.7% and 0.9% for 2014 and

2015.

Among the emergers, growth is near-zero in Brazil

and Russia, and Turkey and South Africa are flirting

with contraction. Growth indicators also remain

lackluster in China – including prices of China-

sensitive commodities like iron ore and copper.

The positive news continues to come mostly from

the US and UK. In particular, US consumer

spending is slowly strengthening on the back of a

better labour market. US GDP should now average

a 3% annual growth rate for H2 2014, with this pace

being maintained into next year.

But there have also been important (connected)

developments in oil and exchange rate markets.

World oil prices have now come down 20% since

June. A fall in prices on this scale could, assuming it

is not reversed, give the advanced economies a

significant boost - especially large net oil importers

such as the Eurozone and Japan.

Meanwhile the dollar has appreciated around 6%

over the same period. In theory this should be

neutral for world growth, but insofar as this

appreciation boosts growth in weak economies such

as the Eurozone and Japan, it may actually help

reduce the tail risks to world growth and boost

global confidence.

Thanks in part to these recent developments, we

continue to expect world GDP growth to pick up in

2015, reaching 2.9% from 2.6% this year. This is a

modest growth outlook and implies minimal inflation

risks - key reasons why we expect global interest

rates to rise relatively slowly in the next 18 months.



2013 2014 2015 2016 2017 2018Real GDP

North America

United States 2.2 2.2 3.1 2.9 2.8 2.8 Canada 2.0 2.1 2.1 2.4 2.4 2.4

Europe

Eurozone -0.4 0.8 1.3 1.7 1.7 1.7 Germany 0.2 1.4 1.7 2.2 1.9 1.5 France 0.4 0.4 1.0 1.3 1.4 1.6 Italy -1.8 -0.3 0.1 0.8 1.0 1.0 UK 1.7 3.1 2.7 2.5 2.6 2.5 EU27 0.1 1.3 1.7 2.0 2.0 1.9

Asia

Japan 1.5 0.7 0.9 0.9 1.3 1.0 China 7.7 7.4 6.7 6.5 6.5 6.5 India 4.7 5.3 5.6 6.1 6.6 6.9

G7 1.5 1.6 2.2 2.2 2.2 2.2 World 2.4 2.6 2.9 3.2 3.4 3.4 World 2010 PPPs 3.0 3.1 3.5 3.8 4.0 3.9 World trade 2.8 3.5 5.2 5.7 5.6 5.4Inflation (CPI)

North America

United States 1.5 1.8 1.9 2.1 2.2 2.2 Canada 1.0 1.9 2.0 2.1 2.0 2.0

Europe

Eurozone 1.3 0.5 0.9 1.4 1.5 1.6 Germany 1.5 1.0 1.3 1.8 1.8 1.6 France 0.9 0.6 1.2 1.5 1.6 1.7 Italy 1.2 0.3 0.4 1.2 1.3 1.5 UK 2.6 1.7 1.6 2.0 2.0 2.0 EU27 1.5 0.7 1.1 1.5 1.6 1.7 Asia

Japan 0.4 2.8 1.4 1.3 0.7 0.9 Emerging Asia, excl Japan 5.0 5.3 5.2 4.7 4.4 4.3 China 2.6 2.3 2.5 2.7 3.0 3.0 India 10.1 8.0 7.1 6.6 6.3 6.0

World 3.7 3.2 2.9 2.8 2.5 2.3Exchange Rates

US$ Effective 76.0 78.3 82.7 83.4 83.3 82.9 $/€ 1.33 1.33 1.23 1.21 1.20 1.19 ¥/$ 97.6 104.5 111.5 112.6 111.7 110.9Commodity Prices

Brent Oil ($/bl) 108.7 102.7 94.3 102.5 107.1 111.4

Summary of International Forecasts



0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

2000 2002 2004 2006 2008 2010 2012 2014 2016

Source: Oxford Economics/ Haver Analytics

Eurozone: $/€ exchange rate

F'cast

$/€

7

8

9

10

11

12

13

1994 1997 2000 2003 2006 2009 2012 2015

Source: Oxford Economics

%

F'cast

Eurozone: Unemployment

Eurozone Economy

Just eight banks failed the latest round of European

stress tests and were adjudged to have insufficient

capital to weather a major downturn in European

demand with a cumulative shortfall of just €6.4bn. But

this rather misses the point that some €56bn of new

capital has already been raised this year in

anticipation of the exercise. This undoubtedly leaves

the euro area banking sector in a stronger position

and adds grist to our view that there may be upside

risks to bank lending next year as the recovery

gathers momentum.

Latest PMI readings suggest a fourth consecutive

quarter of underlying GDP growth of around 0.2% to

0.3% in Q3 2014 (temporary construction effects

were at fault for the slowdown in Q2). Meanwhile the

labour market continues to tentatively improve, albeit

unevenly, and household confidence along with it.

That said forward-looking industry indicators are

pointing to a softer patch in Q4, possibly due to

slower growth in China and other emergers. We

expect Eurozone GDP growth of 0.8% in 2014.

Looking ahead, even if geopolitical tensions persist,

2015 should see an accelerating recovery. Exporters

will benefit from stronger demand in advanced

economies and also feel the full benefits of a

weakening euro. And though the effects of measures

announced by the ECB through 2014 on bank

lending remain unclear, they should help to loosen

credit standards, supporting business investment.

Meanwhile, although consumer spending will be

constrained in parts of the region by high levels of

household debt, the gradual improvement in the

labour market suggests that households may spend

a bit more freely next year. Overall we expect GDP

growth to pick up to about 1.3% in 2015, and 1.7% in

2016. But several constraints will keep growth around

0.5pp below the average over the decade to 2007 –

including restrained government spending, and

modest consumer spending growth by historical

standards, as households also deleverage.

But deflation remains a threat. There are good

reasons to believe recent inflation outturns represent

a trough, and a depreciating euro should help nudge

price growth to 0.9% next year and 1.4% the year

after. But at such limp rates of price growth and with

high unemployment and still fragile business

sentiment, it would not take an especially powerful

shock to push the Eurozone back towards deflation.

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1997 2000 2003 2006 2009 2012 2015

% year


F'cast

Eurozone: Consumer price inflation



92

94

96

98

100

102

104

2006 2007 2008 2009 2010 2011 2012 2013 2014

UK: GDP revisionsRebased, Q1 2008 = 100

Source : Haver Analytics

New

Old

-6

-4

-2

0

2

4

6

8

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

% year

Consumer spending

Real disposable

income


Forecast

UK: Consumer spending and income

70

75

80

85

90

95

100

105

110

2006 2007 2008 2009 2010 2011 2012 2013 2014

UK: Business investment revisionsRebased, Q1 2008 = 100

Source : Haver Analytics

New

Old

UK Economy

The UK’s recent economic performance appears

in a better light following some substantial

revisions to the national accounts. The Office for

National Statistic has implemented a range of

methodological changes, including the switch to

ESA10, as well as carrying out the annual supply

and use balancing. The new data shows that the

2008-09 recession was shallower, and that the

subsequent recovery was stronger, than

previously thought. GDP is now estimated to have

been 2.7% above the early-2008 peak in Q2

2014, up from the previous estimate of just 0.2%.

We have long argued that the recovery was

stronger than the ONS had reported and in

producing our forecasts we had allowed for the

likelihood that the data would be revised up

substantially. As such, these revisions have little

impact on our forecasts for future periods.

The shape of the recovery has also been revised,

with evidence of greater balance than before.

Whereas previously business investment was

reported to have flat lined for four years before

picking up in 2013, the ONS now suggests it has been growing strongly since 2010, with the level

now 8.0% above the 2008-peak rather than 15.5%

below.

High frequency data have remained relatively firm,

most notably indicators of services activity, and

our short-term model suggests that GDP is likely

to have risen by 0.9% in Q3. However, with

manufacturers struggling in the face of weak

demand from the Eurozone and household

spending power remaining under pressure, growth

appears likely to slow around the turn of the year.

On the 18 September, Scotland voted by a 55%-

45% margin to remain part of the UK. But the

referendum will leave a legacy for the UK, with all

three of the main Westminster parties having

promised to devolve more powers to the Scottish

parliament. It is far from clear how these promises

will be met and there will no doubt be calls for

Wales, Northern Ireland and England to be

granted similar powers. Such fiscal

decentralisation could compromise the ability of

central government to use discretionary fiscal

policy to support the economy.



1 An economic policy or outlook described as ‘dovish’ is one which is primarily concerned with

achieving or maintaining low unemployment in the economy, while an economic policy or outlook

described as being ‘hawkish’ is one which is primarily concerned with a low or on-target inflation rate.

Since low unemployment generally means a higher rate of inflation and vice versa, any economic

policy or outlook must be either dovish or hawkish in nature; it cannot be both.

US Economy

The final reading of Q2 GDP showed the economy

advancing 4.6%, as final sales grew 3.2% and

inventories contributed 1.4 percentage points to

growth. Business investment stole the limelight with a

9.7% rise and gains in all three major subcategories.

As the economy enters the final straight in 2014, we

believe real GDP growth advanced 3.2% in the third

quarter. As such, the economy should average 3% in

the second half of the year.

We foresee a supportive labour market with strong

payroll gains going into 2015. The 12-month moving

average of payroll gains is currently sitting at 213,000

which is indicative of solid momentum. Nonetheless,

still-high under-employment and the large number of

long-term unemployed point to ongoing slack.

The economy’s missing link should gradually

materialize in the final months of 2014. We expect

that increased labour compensation will boost

income growth and support stronger household

spending and housing activity. We see consumer

spending advancing 2.3% in 2014 and 2.9% in 2015. Despite only a tentative rebound in housing activity

so far this year, we remain cautiously optimistic that

stronger wage growth will underpin stronger demand

for homes.

Business investment should continue to play an

important role in Q3 and Q4 as most leading

indicators are flashing green.

A stronger US dollar will weigh on US export

competitiveness, but the greenback remains

historically competitive and gradually firming global

demand should provide some offset.

Inflation should edge up in the latter part of 2014, but

it remains comfortably below the Fed’s 2% inflation

target. As such, the Fed will likely maintain a

‘dovish’1, stance in the coming months, with the first

short-term rate hike occurring in Q2 2015.

-3

-2

-1

0

1

2

3

4

2006 2008 2010 2012 2014 2016

US: GDP growth% year

Source: Oxford Economics/ Haver Analytics

% year

Forecast



80

90

100

110

120

40

45

50

55

60

Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

Composite PMI

Index of coincident indicators

Source: Markit / Cabinet Office / Haver Analytics

Japan: PMI and coincident indicators

Index: 50 = neutral Index: 2010 = 100

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2000 2002 2004 2006 2008 2010 2012 2014

United States

China

Source: Ministry of Finance / Japan Tariff Association / Haver Analytics

Japan: Merchandise trade with US and China

Billion yen

Japanese Economy

The recovery from Q2’s contraction is looking even weaker than previously thought. While PMI surveys have been mildly encouraging (with the composite index at a six-month high of 52.8 in September), other data have been much more downbeat.

Industrial production is likely to have fallen for a second consecutive quarter in Q3 after falling 1.6% in August. Real household consumption has continued to edge down, dropping 0.3% on the month in August. And real exports fell 0.4% in August, meaning net trade will have been a drag on growth in Q3. The only relatively reassuring sign is that services have at least stabilised, with the tertiary activity index flat in August.

As a result of this disappointing data, we now estimate that GDP grew by only 0.2% in Q3, and there is a significant risk that Japan may even have entered recession. Our GDP forecast for 2014 as a whole has thus been revised down to 0.7% (from 0.9%).

In addition, the outlook over the next couple of years has deteriorated. Although we have weakened our yen forecast again slightly, we have at the same time downgraded our near term forecast for China. This will weigh notably on Japan’s export sector, and indeed will more than offset the effects of a weaker currency.

We still expect the second sales tax hike to go ahead in October 2015, given the seriousness of the fiscal situation and the credibility the government has staked on it. But we now assume a larger hit to activity, given the emerging evidence on the impact of the first tax hike. This reassessment of the sales tax impact plus the China downgrades means we now see growth in 2015 and 2016 at 0.9%, down from 1% and 1.1% respectively last month.

Despite this backdrop, the Bank of Japan has not given any signs of altering its stance on the desirability of additional monetary stimulus. We thus still see the Bank of Japan holding policy in the near term, although a negative outturn for Q3 could force a reversal of this stance.

-3

-2

-1

0

1

2

3

4

2000 2002 2004 2006 2008 2010 2012 2014

CPI inflation

Core-core inflation (ex food and fuel)

Source: Ministry of Internal Affairs and Communications / Haver Analytics

Japan: Consumer price inflation

% year

2% target



0

2

4

6

8

10

12

14

16

-15

-10

-5

0

5

10

15

2000 2001 2003 2004 2006 2007 2009 2010 2012 2013

China: GDP and alternative indicator%


GDP (RHS)

Alternative activity indicator (LHS)

% year

Alternative activity indicator is average of normalised y/y growth rates of electricity output, rail freight and real credit

0

50

100

150

200

250

300

2007 2010 2013 2014 2015

General GovernmentLocal GovernmentNonfinancial CorporationsFinancial SectorHouseholds

China: Outstanding debt% GDP


Total debt

2014 breakdown is for H1

f'castf'cast

-20

-15

-10

-5

0

5

10

15

20

25

30

2001 2003 2005 2007 2009 2011 2013

% year (3 month moving average)

Source: Korea National Statistics Office

Korea: Output

Industry

Services

Emerging Market Economies

Real estate investment slows in China

The Chinese authorities are likely to narrowly miss their

7.5% growth target for 2014. Indicators suggest quite a

sharp slowdown in activity, with industrial production

growing at its slowest rate since 2009 and lower imports

than the year before for the past two months. But official

data tend to ‘smooth’ the path of growth somewhat.

Real estate investment growth has fallen sharply from

almost 20% year-on-year last year to just over 13% in

August. This will make quite a dent in overall investment

(real estate-related investment accounts for about a

quarter of total investment) on top of a ban on further

investment in industries with substantial overcapacity.

The authorities have introduced some targeted policies

to ease pressure on small enterprises, the rural

economy and some aspects of the housing market. At

the same time they are acting to bring shadow banking

under better control. We do not expect a repeat of the

massive monetary stimulus that was their response to

the global financial crisis – indeed total loan growth has

slowed sharply to around 15% from over 20% a year

ago.

Next year could therefore see a more substantial

slowdown in activity. We have eased our forecast down

to 6.7% from 6.9%, and now expect the economy to

grow no more than 6.5% in subsequent years – and

substantially less further out.

Other Asian economies battle on

Protests in Hong Kong have so far caused more political

than economic disruption, but if they continue, we would

expect to cut our already low consumer spending

forecast, with tourist income falling and confidence

significantly dampened. Exports would also be hit. For

now, though, we continue to expect GDP growth of 2%

this year and 2.9% in 2015, held back by a subdued

housing market and high household debt levels.

Growth elsewhere in the Asian region is continuing at a

more modest pace than in Q2. The latest PMIs put

Taiwan at the front of the pack after 13 consecutive

months of expansion. New orders and export orders are

still strong, reflecting the economy’s competitive position

in electronics. Meanwhile, Korea’s manufacturing PMI

again dipped below 50 (indicating contraction) as a

strong won and weak domestic demand continue to

dampen activity. The government recently announced a

more expansionary budget for 2015-17 to follow an

increase in spending this year. As a result we expect



-3

0

3

6

9

12

15

18

2000 2002 2004 2006 2008 2010 2012 2014

%

Source: Haver Analytics

India: Interest rates & inflation

Repo rate

CPI

Total WPI

70

75

80

85

90

95

100

105

110

115

120

125

130

2006 2007 2008 2009 2010 2011 2012 2013 2014

Business Confidence Consumer Confidence

Brazil: Business and consumer confidence*Points

Source : FGV

* dashed lines denote long-term averages

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

2002 2004 2006 2008 2010 2012 2014

% year

Source: Haver Analytics

Russia: Industrial output

Mining

Manufacturing

the economy to grow slightly faster: our GDP growth

forecast for 2015 is now 3.6% (up from 3.5%) with 3.8% in

2016 (from 3.7%).

India yet to escape era of slow growth

Indian GDP increased by 5.7% year-on-year in Q2, with

stronger manufacturing and services output. Some of this

was driven by temporary factors, however, including a

near-9% increase in government consumption. Our

growth forecast is unchanged at 5.3% this year and 5.6%

in 2015. Inflation is starting to come down, with lower food

and oil prices reining in wholesale price inflation, but so

far the CPI inflation measure, which matters more for

consumption, has eased only slightly from 8% in July to

7.8% in August. With the exception of one strong month in

March, industrial production has also remained lacklustre,

and the manufacturing PMI slipped to 51.0 in September.

This was the lowest reading so far in 2014, suggesting the

economy has yet to escape from its long period of modest

growth.

Dilma re-elected

President Rousseff’s re-election spurred a sharp market

sell-off, as expected. Still, the downturn is less severe

than expected, and given important economic demands

and political pressures, there are growing hopes that

Rousseff’s near-term policy stance may be slightly more

market-friendly than initially anticipated. We sense

markets may be slightly too pessimistic, yet market

behaviour in the months ahead will be driven by looming

cabinet changes and potential policy announcements. The

economy has been contracting for much of this year, the

fiscal position is the weakest since the 1990s and inflation

remains above target. As interest rates and debt levels

have continued to rise, households have become more

cautious about borrowing to spend. But investment will

also remain depressed by high interest rates and a poor

policy environment. We continue to expect no growth at

all this year, with a paltry 0.9% expansion in 2015.

Russian economy to remain stagnant

The outlook for Russia remains poor. Investment is likely

to have fallen over the quarter in Q3, and retail sales

growth remains weak, pointing to sluggish consumption.

The rouble has fallen almost 9% against the US$ since

the end of August, a result of lower oil prices and

continued tensions with Ukraine, and the central bank will

probably hike rates later this month. GDP is likely to have

declined in Q3 and we envisage a stagnant economy into

2015. Our forecast for this year has been revised up to

0.5% (from zero growth last month) but this is to take

account of revised GDP data for H1 – it does not reflect

any change in our view of Russia’s prospects.



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 Organizations

Austria Austrian National Tourist Office (ANTO)

Belgium Flanders: Visit Flanders

Wallonia: Tourist Office for Wallonia-Brussels

Bulgaria Ministry of Economy and Energy

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 Ltd.

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 Romanian National Authority for 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

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