WTTC: Travel & Tourism still robust despite uncertain global economic picture
Growth in the global Travel & Tourism industry in 2012 will be broadly in line with expectations set at the beginning of the year. In an update of forecasts made at the beginning of the year, the World Travel & Tourism Council (WTTC) predicts growth for the Travel & Tourism globally of 2.7%, only slightly downgraded from the 2.8% that was expected for the industry at the beginning of the year.
South Korea's annual Travel & Tourism GDP growth of 13.2% is the highest of any G20 country. Its boom coincides with its self- designation of 2010-2012 as the "Visit Korea" years and strong international demand from its main two markets (Japan and China). Favourable exchange rates and a number of cultural, sporting and economic events have also contributed to its booming Travel & Tourism growth.
By contrast, Italy is currently showing the weakest performance of any G20 country, with negative Travel & Tourism GDP growth of -2.8% now expected in 2012.
David Scowsill, President & CEO, WTTC said: "The latest figures from WTTC confirm the resilience of the Travel & Tourism industry around the world. Despite some specific and regional downgrades to short-term economic and industry forecasts, the longer-term prospects for Travel & Tourism remain very positive, and continue to be boosted by strong growth and rising prosperity in emerging markets. We expect the direct contribution of Travel & Tourism to global GDP to grow by an average of 4% per annum between 2011 and 2021 with North East Asia making up a growing share of the overall Travel & Tourism contribution to GDP."
Highlights of the report include:
- The volume of Travel & Tourism movements has been positive so far in 2012 and has exceeded expectations from the start of the year. International tourist arrivals have grown 4.9% in the year from January to June, airline passenger traffic is up 6.8%, and hotel occupancy rates are up in many markets apart from Southern Europe.
- The best performing countries for international tourist arrivals are those rebounding from difficult times in 2010 and 2011. In the period from January to June this year, Japan's arrival figures were up 44.4%, Tunisia was up 41.7% and Egypt was up 23.4%. South Korea, where visitors from its main market of Japan stayed home after the tsunami, has also been incredibly strong this year with arrivals figures increasing 21.8% YTD.
- Although international visitor's arrival figures are looking robust, there is evidence of declines both in terms of average spend and hotel average daily room rates (ADRs) in some regions – notably Europe, Northern and Southern Africa.
- In weaker markets, especially Europe, the data is suggesting that the industry could be holding prices down in order to stimulate demand and consumers are choosing lower priced trips.
Regionally, the report shows:
- The largest downward revisions are in the Middle East and Europe.
- In the Middle East, projections for Travel & Tourism GDP are still for growth overall, but as the region continues to struggle with further turmoil and negative perceptions of safety and security, growth has been revised down to 1.8% from 3.1% in January. Lebanon's international tourist arrivals, showing -12.4% growth, has been depressed by the conflict in neighbouring Syria.
- Europe is the only world region where negative Travel & Tourism GDP growth is expected. WTTC forecasts further downgrades European Travel & Tourism GDP to -0.6% from -0.2% at the start of the year. Greece continues to struggle with Travel & Tourism contributed €12.4bn or 6.4% of GDP to its economy in 2011, but has experienced a 9% decline in visitor arrivals in the first half of this year. Italy's economic difficulties this year have clearly had an impact on its domestic tourism spend which has declined by nearly -4% in the year to date. Overall, Italy's Travel & Tourism GDP is expected to be negative at -2.8% in 2012.
- Small downward revisions have also been made for Sub Saharan Africa, Caribbean and Latin America.
- On a positive note, upward projections have been forecast for Oceania (3.2% Travel & Tourism GDP growth up from 2.4% growth expected earlier in the year) and South East Asia (up 1.1 percentage points to 5.5%), with a smaller positive revision expected for North America (up 0.4% percentage points to 1.5%).
- Global Travel & Tourism growth is still being driven by emerging economies, particularly those in Asia. China's Travel & Tourism GDP will grow 7.2% and India by 5.7% in 2012, although slight downward revisions have been made. The revision in China's Travel & Tourism growth by 1.2 percentage points is largely linked to a weaker export performance elsewhere in its economy as the struggling Eurozone is the destination for around 15% of China's exports. India's downgrade is the result of its major infrastructure problems contributing to power blackouts that affected half of its population in the second quarter of this year.
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The World Travel & Tourism Council is the global authority on the economic and social contribution of Travel & Tourism. It promotes sustainable growth for the industry, working with governments and international institutions to create jobs, to drive exports and to generate prosperity. WTTC"s annual Global Summit brings together over 1,000 delegates to discuss the opportunities, challenges and issues facing the industry, while its Tourism for Tomorrow Awards recognise the industry"s power to be a positive force in sustainability.
The sector is a key driver for investment and economic growth globally. In 2014, Travel & Tourism generated 9.8% of global GDP, some $7.6 trillion, and supported almost 277 million jobs, or 1 in 11 jobs worldwide. By the end of 2015, Travel & Tourism is expected to contribute US$7,860 trillion, 10% of global GDP, and to account for 284 million jobs, 9.5% of total employment.
For almost 25 years, WTTC has been the voice of this industry globally. Members are the Chairs, Presidents and Chief Executives of the world"s leading, private sector Travel & Tourism businesses. These Members bring specialist knowledge to guide government policy and decision-making, raising awareness of the importance of the industry as an economic generator of prosperity.