City Tourism Outlook and Ranking: Coronavirus Impacts and Recovery

David Goodger Kieran Ferran Managing Director, EMEA Senior Economist Tourism Economics Tourism Economics [email protected] [email protected]

April 2020 Coronavirus has spread more widely and rapidly than expected

Countries with travel restrictions, shaded according to inbound travel spending • Vast majority of countries affected

• Travel restrictions have been imposed by most countries

• Significant impacts on travel to, from and within countries in near- term

Source: Tourism Economics Global Travel Service (GTS)

Questions: Use the question panel on the right Global lockdowns are having a very large impact on economy and travel

Global lockdowns China Italy 16% Spain France Germany Past US (specific states) UK India Australia Japan Other 63%

Present

0 20 40 60 80 100 Source : Oxford Economics/Haver Analytics % of global GDP Questions: Use the question panel on the right Immediate economic impact will be greater than during GFC

World: GDP Forecast % quarter Non-China EM q/q contribution 4 China q/q contribution Advanced economies q/q contribution Global % quarter 2

-2

-4

-6

-8 2007 2009 2011 2013 2015 2017 2019 2021 Source : Oxford Economics/Haver Analytics Questions: Use the question panel on the right Policy stimulus is providing vital support

Global: Fiscal impulse Ppts of potential GDP 2.5 Advanced Economies Emerging Markets World 2.0

1.5

1.0

0.5

0.0

-0.5

-1.0 Forecast -1.5

-2.0 2000 2005 2010 2015 2020 Source : Oxford Economics/Haver Analytics

Questions: Use the question panel on the right Expected growth in recovery but impacts will be felt into the medium term

Global GDP Outlook Annual growth, % Global US Eurozone China 10% 8% 6% 4% 2022 GDP relative to 2% pre-recession trend 0% -2% -4% -6% 2019 2020 2021 2022 Source: Oxford Economics

Questions: Use the question panel on the right Huge hit to labour market will impact consumer and travel demand

Labour shocks % of Total employment 16 France - workers temporarily laid-off under government support scheme US - rise in jobless claims in the four weeks to Mar 28 14 Spain - fall in employment end-Feb to end-March UK - applications for universal credit Mar 16 to 31 12

0 France US Spain UK Source : Oxford Economics/Haver Analytics Questions: Use the question panel on the right International travel will fall more sharply than GDP for the year

Global GDP & Tourist Arrivals Annual growth, % GDP (real price) 40% Prior upside 30% Prior downside 20% New baseline 10% 0% -10% -20% -30% -40% -50% 2001 2004 2007 2010 2013 2016 2019 2022 Source: Tourism Economics

Questions: Use the question panel on the right Impacts felt across all regions

Global city international visitor arrivals by destination region, relative to 2019 % difference from 2019 levels 20%

10% 2020 2021 2022 2023

-10%

-20%

-30%

-40%

-50% Asia Pacific Europe North America Latin America Middle East & Africa Source: Tourism Economics

Questions: Use the question panel on the right Expected impacts in 2020 will be affected by duration and seasonality

Global arrivals: average monthly seasonality Europe • Expected 8-month impact period covers % share annual arrivals, 2013-18 MEA over 3/4 usual annual European travel activity – but a smaller amount of usual 16% APAC travel for Middle East and Africa (2/3). 14% N America

12% Latin America • Within this, current restrictions are 10% expected for around 4 months. 8% 6% • Duration of current restrictions will have 4% a big impact on flows – some tapering may begin peak summer months. 2%

0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • “Typical airline had 2 months of cash at Source: UNWTO, Tourism Economics the start of the year” according to IATA - airline failures may follow.

Questions: Use the question panel on the right Occupancy falls below 50% in most major markets

Average Hotel Occupancy Rate by Country & Region China Occupancy rate,%, rolling 7 day average for week ending 80 Asia Pacific excl. China Europe 70 USA 60

0 Jan 12th 19th 26th Feb 9th 16th 23rd Mar 8th 15th 22nd 29th Apr 5th 2nd 1st 5th Source: STR, Tourism Economics Datafor week ending Questions: Use the question panel on the right Occupancy falls below 50% in most major markets

Average Hotel Occupancy Rate by Market

Occupancy rate, %, rolling 7 day average for week ending Data for week ending 100 Feb23rd 90 Mar 22nd 80 70 60 50 40 30 20 10

Milan

Berlin

Leeds

Dubai

Dublin

Madrid

Sydney

Munich

London

Brussels

Mumbai

Moscow

Cologne

Glasgow

Budapest

Hamburg

Edinburgh

Dusseldorf

Melbourne

Amsterdam Birmingham

Source: STR, Tourism Economics

Questions: Use the question panel on the right Largest city destinations hit hardest…

City international visitor arrivals decline, 2019-2020 (mn) % change Hong Kong -51% -10.3 Bangkok -42% -9.7 Macao -41% -8.2 Dubai -41% -6.7 London -40% -5.7 Shenzhen -43% -4.9 Paris -36% -4.8 New York -34% -4.6 Rome -42% -4.6 Singapore -37% -4.3 Tokyo -37% -4.2 Osaka -42% -3.8 Kuala Lumpur -36% -3.8 Barcelona -37% -3.5 Guangzhou -42% -3.3 -12 -10 -8 -6 -4 -2 0 Source: Tourism Economics

Questions: Use the question panel on the right … but declines in international visitor arrivals in all cities in 2020

Decline in international city visitor arrivals (mn), 2019-2020

Questions: Use the question panel on the right Some changes to the city rankings

Global city international visitor arrivals 2019 2019 2020 2020 2025 2025 Rank (mn) Rank (mn) Rank (mn) Bangkok 1 22.9 1 13.2 1 25.7 Hong Kong 2 20.1 3 9.8 3 22.5 Macao 3 19.8 2 11.6 2 23.9 Dubai 4 16.3 4 9.5 4 19.5 London 5 14.2 7 8.5 5 15.5 New York 6 13.5 5 8.9 8 14.4 Paris 7 13.4 6 8.6 7 14.6 Singapore 8 11.8 8 7.5 6 15.1 Shenzhen 9 11.6 12 6.6 11 13.5 Tokyo 10 11.3 9 7.2 10 13.9 Rome 11 10.9 13 6.3 14 10.9 Kuala Lumpur 12 10.6 11 6.8 9 14.0 Shanghai 13 10.3 10 7.0 12 10.9 Barcelona 14 9.3 14 5.9 18 9.8 Osaka 15 9.1 17 5.2 17 9.9

Moved up rankings Moved down rankings Source: Tourism Economics Key: relative to 2019 relative to 2019 Questions: Use the question panel on the right Cities with large proportion of long-haul visitors may take longer to recover

Top 15 city destinations, split by distance, 2020 (mn) Bangkok 75% 25% Macao 98% 2% Hong Kong 88% 12% Dubai 29% 71% New York 26% 74% Paris 54% 46% London 63% 37% Singapore 83% 17% Tokyo 76% 24% Shanghai 68% 32% Kuala Lumpur 89% 11% Shenzhen 81% 19% Short- & Medium-haul Rome 57% 43% Long-haul Barcelona 60% 40% Cancún 90% 10% 0 5 10 15 Source: Tourism Economics

Questions: Use the question panel on the right Return to 2019 levels of international visitor arrivals will take several years…

City international visitor arrivals (mn), 2019 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right … declines in international arrivals are forecast for all cities in 2020…

City international visitor arrivals (mn), 2020 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right …some recovery in 2021 but all cities will still remain below 2019 levels…

City international visitor arrivals (mn), 2021 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right …it will take until 2022 before the first cities return to 2019 levels…

City international visitor arrivals (mn), 2022 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right … and by 2023 most cities are expected to exceed 2019 levels…

City international visitor arrivals (mn), 2023 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right … with almost all cities recovered to at least 2019 levels by 2024…

City international visitor arrivals (mn), 2024 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right … but by 2025, some Italian cities still remain below 2019 levels.

City international visitor arrivals (mn), 2025 Key: International visitor arrivals below 2019 level International visitor arrivals equal to or above 2019 levels Levels: 0mn 5mn 10mn 15mn 20mn 25mn

Questions: Use the question panel on the right Domestic visitor arrivals will decline sharply in 2020

Decline in city domestic visitor arrivals by region, 2019-2020 (mn) Domestic share of total city arrivals 2020 China 90%

Asia Pacific (exc. China) 53%

North America 73%

Europe 35%

Middle East & Africa 49% International Latin America 60% Domestic

-400 -300 -200 -100 0 Source: Tourism Economics

Questions: Use the question panel on the right Domestic recovery by 2021 but international recovery will take 2 more years

Global city international vs domestic visitor arrivals (mn) 3,000 International visitor arrivals 2,500 Domestic visitor arrivals

2,000

1,500

1,000

500

0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Tourism Economics

Questions: Use the question panel on the right The recovery will be uneven

City reliance on domestic and long-haul arrivals, 2020

Less Volatile Jakarta 100% Shanghai Tokyo

Hangzhou 80% Cracow Cape Town Orlando Riyadh 60% Los Angeles Miami New York San Francisco Rome Paris 40% Istanbul Abu Dhabi London Barcelona

20% Domestic % share of total arrivals total of share % Domestic Dubai More Volatile 0% 0% 20% 40% 60% 80% 100% Long-haul % share of international arrivals Source: Tourism Economics Note: Annotated cities are those ranked in top 50 largest cities for international visitor arrivals Questions: Use the question panel on the right We are looking to support you during these uncertain times with 3-month subscription access* to:

• Tourism Forecast Services Including access to Global Travel Service (GTS) flows for 185 countries and Global City Travel (GCT) data and forecasts for over 300 cities • All of our Research Briefings Receive all the latest research updates from Oxford Economics to monitor the global and regional impact of the coronavirus, the implications for financial markets as well as all of our current thematic research on global economic developments. • Our Global Scenario Service This service allows you to quantify the effects of the coronavirus spread on our baseline forecasts for the 80 most important countries and compare this with our latest coronavirus pandemic scenario as well as to other current global risk scenarios, such as US or world recession.

If you would like to receive further information, please contact: [email protected] *a discounted fee structure applies

Questions: Use the question panel on the right Global headquarters Offices in Offices in Offices Oxford Economics Ltd Europe, Middle East Americas Asia Pacific Abbey House and Africa 121 St Aldates New York Singapore Oxford, OX1 1HB Oxford Philadelphia Sydney UK London Mexico City Hong Kong Tel: +44 (0)1865 268900 Belfast Boston Tokyo Frankfurt Chicago London Paris Los Angeles Broadwall House Milan Toronto 21 Broadwall Cape Town San Francisco London, SE1 9PL Dubai Houston UK Tel: +44 (0)203 910 8000

New York 5 Hanover Square, 8th Floor New York, NY 10004 USA Tel: +1 (646) 786 1879

Singapore 6 Battery Road Email: #38-05 [email protected] Singapore 049909 Tel: +65 6850 0110 Website: www.oxfordeconomics.com