European Tourism in 2018: Trends & Prospects (Q3/2018)
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European Tourism in 2018: Trends & Prospects (Q3/2018) EUROPEAN TOURISM IN 2018 TRENDS & PROSPECTS APRIL 2016 European Tourism in 2018: Trends & Prospects (Q3/2018) EUROPEAN TOURISM IN 2018: TRENDS & PROSPECTS Quarterly Report (Q3/2018) A quarterly insights report produced for the Market Intelligence Group of the European Travel Commission (ETC) by Tourism Economics (an Oxford Economics Company) Brussels, November 2018 ETC Market Intelligence Report 1 European Tourism in 2018: Trends & Prospects (Q3/2018) Copyright © 2018 European Travel Commission European Tourism in 2018: Trends & Prospects (Q3/2018) 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 en- courage 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 ex- pression of any opinions whatsoever on the part of the Executive Unit of the European Travel Com- mission. Data sources: This report includes data from the TourMIS database (http://www.tourmis.info), STR, IATA, and UNWTO. Economic analysis and forecasts are provided by Tourism Economics and are for interpretation by us- ers 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: Foggy autumnal sunrise at famous Hallstatt lakeside town reflecting in Hallstattersee lake. Lo- cation: resort village Hallstatt, Salzkammergut region, Austria, Alps. Europe Image ID: 1111445330 Copyright: Vadym Lavra 2 European Tourism in 2018: Trends & Prospects (Q3/2018) TABLE OF CONTENTS Foreword ............................................................................................................. 4 1. Tourism Performance Summary 2018 ............................................................ 8 2. Global Tourism Forecast Summary .............................................................. 12 3. Recent Industry Performance ....................................................................... 14 3.1 Air Transport .......................................................................................... 14 3.2 Accommodation ..................................................................................... 18 4. Special Feature: A Burgeoning Trade War ................................................... 19 5. Key Source Market Performance .................................................................. 23 5.1 Key Intra-European Markets .................................................................. 23 5.2 Non-European Markets .......................................................................... 29 6. Origin Market Share Analysis........................................................................ 33 6.1 United States .......................................................................................... 34 6.2 Canada ................................................................................................... 35 6.3 Mexico .................................................................................................... 36 6.4 Argentina ................................................................................................ 37 6.5 Brazil ...................................................................................................... 38 6.6 India ....................................................................................................... 39 6.7 China ...................................................................................................... 40 6.8 Japan ..................................................................................................... 41 6.9 Australia ................................................................................................. 42 6.10 United Arab Emirates ........................................................................... 43 6.11 Russia .................................................................................................. 44 7. Economic Outlook ......................................................................................... 45 7.1 Overview ................................................................................................ 45 7.2 Eurozone ................................................................................................ 48 7.3 United Kingdom...................................................................................... 49 7.4 United States .......................................................................................... 50 7.5 Japan ..................................................................................................... 51 7.6 Emerging Markets .................................................................................. 52 8. Appendix 1 .................................................................................................... 55 9. Appendix 2 .................................................................................................... 57 3 European Tourism in 2018: Trends & Prospects (Q3/2018) FOREWORD SOUTHERN MEDITERRANEAN DESTINATIONS LEAD SUBSTANTIAL TOURISM GROWTH IN EUROPE OVER THE SUMMER European tourism enjoyed a sustained expansion amid less relaxed global finan- cial conditions and risks of a disruptive trade war posing a threat to global eco- nomic growth. The region saw a +7% increase in international tourist arrivals in the first six months of the year compared to the same period in 20171 Growth was synchronised with the positive economic conditions in Europe which boosted intra-regional demand and was supported by improved air connectivity, notably from China. All but two reporting destinations delivered some form of growth, with 1 in 4 en- joying increases in excess of 10% in arrivals terms. Southern Mediterranean des- tinations outperformed; in Turkey (+23%), fading security concerns and the de- preciation of the lira rendered the country more appealing to foreign holidaymakers. Greece (+19%) and Serbia (+15%) saw sizeable increases from a wide range of source markets particularly from China2, while Malta’s Valletta was declared Europe’s Capital of Culture prompting an upsurge of arrivals (+16%). Belgium (+9%) continues to recover, and growth was further driven by the exceptionally warm weather in northern Europe. International tourist arrivals to select destinations in 2018 2018 year-to-date*, % change year ago Source: TourMIS *date (Jan-Sep) by destination 1 UNWTO World Tourism Barometer (Volume 16. Issue 4. October 2018) 2 https://ecty2018.org/download/4966/ and https://ecty2018.org/download/4970/ 4 European Tourism in 2018: Trends & Prospects (Q3/2018) In Iceland (+6%) the substantial growth in arrivals from the US and Russia was able to offset the declines from a wide range of source markets. Spain (-0.1%) felt the pinch in some areas due to lingering concerns regarding “over-tourism”, while the return of some “borrowed” market share to Turkey led to the destina- tion’s slowdown. Northwards, weaker sterling was not enough to stimulate arri- vals growth in the UK (-7%). AIR TRAVEL DEMAND AND ACCOMMODATION INDICATORS REMAIN POSITIVE AND STABLE Air travel flight strikes and a mixed economic outlook appear to have had an impact on European air traffic growth with RPK3 slowing to 6.2% based on year- to-date figures. Travel to and from Asia/Pacific registered the fastest growth with RPK 9.5% higher than a year ago. Chinese carriers continue to drive the accel- erated openings of new flights between Europe and China. Annual International Air Passenger Growth 2016 % year, RPK 2017 12 2018 10 8 6 4 2 0 Africa Asia/Pacific Europe Latin Mid. East N. America World America Source: IATA European hotels fared well when compared to other world regions with higher occupancy (1.1%) and Average Daily Rates (1.9%) yielding 3% growth in Reve- nue Per Available Room. ESCALATING TRADE WARS AND A VOLATILE GLOBAL ECONOMIC OUTLOOK. WHAT ARE THE IMPACTS ON TRAVEL FROM EUROPE’S LARGEST LONG-HAUL SOURCE MARKETS? Although the global economy is still growing4, political discord and trade wars are starting to lean on growth prospects in advanced economies (except the US) and 3 Revenue Passenger Kilometers 4 IMF forecast for world GDP growth is projected at 3.7% for 2018 5 European Tourism in 2018: Trends & Prospects (Q3/2018) emerging markets, which are in the spotlight amidst volatile financial conditions5. While the US and China are embroiled in a trade war, travel demand from both markets remains strong based on latest data available. In the US, robust growth and low unemployment rates, aided by recent tax reform, is yielding a stronger dollar and is resulting in solid consumer confidence that has sustained income and consumption growth. Europe hosted around 30 million US travellers in 2017 and current growth is es- timated to have increased by +8% compared to the previous year. Although there are some concerns as to whether the US outperformance will continue after 2019, prospects for US arrivals indicate 5% annual average growth through to 2022. Significant