World Travel Trends Report: Europe Continues To Exceed The Long-term Growth Forecasts
With a 4% increase in international tourist arrivals from January through August 2007, Europe looks set to achieve another record year in terms of tourism growth, according to the World Travel Trends Report of ITB Berlin and IPK International.
With a 4% increase in international tourist arrivals from January through August 2007, Europe looks set to achieve another record year in terms of tourism growth, according to the World Travel Trends Report of ITB Berlin and IPK International.
Moreover, as the participants gathered in Pisa for the 15th World Travel Monitor Forum from 24-26 October agreed, the growth is remarkable since it will exceed the World Tourism Organization’s (UNWTO’s) long-term annual growth forecast for Europe of 3% for the fourth consecutive year.
If the 4% increase seen in the first eight months of this year continues through to the end of 2007, this will mean an additional 18 million arrivals – no mean feat for the world’s most mature destination region.
Demand for Central & Eastern Europe seems to have largely bottomed out…
Nevertheless, as data gathered from their members by UNWTO and the European Travel Commission (ETC) shows, the Europe-wide average for inbound tourist arrivals, estimated by UNWTO based on data available at the end of October, masks some fairly wide variations from one sub-region to another. The huge pent-up demand for Central & Eastern Europe over the past few years, for example, now seems to have largely bottomed out, although some countries in the region are continuing to perform well – e.g. Latvia and Lithuania – and Romania’s tourism has strongly benefited from its membership of the European Union.
…and other sub-regions have shown mixed results
Northern Europe, on the other hand, has shown a marked slowdown in growth this year – largely due to the stagnation in international visitors to the UK – although some destinations have turned in good results. Finland is one example, having recorded a growth of nearly 8% in overnight volume from January through August.
Growth to Western Europe has also slowed, according to UNWTO – albeit only from 5% to 3% – attributed in part to Germany’s decline in arrivals through the second quarter of 2007. This was of course hardly surprising, given the huge boost to inbound tourism demand over the same period in 2006 provided by the country’s hosting of the FIFA Football World Cup.
Europe’s star performer this year so far, in terms of sub-regions, is Southern/Mediterranean Europe – up 7% in terms of international arrivals through the month of August. The sharp recovery of Turkey has been a main contributor to the improved performance, but the Balkan States have also performed well above average – in particular Montenegro and Serbia – and Malta has had an excellent year so far, largely thanks to the introduction of low-cost airline services.
European inbound is mainly intra-regional
The performance of long-haul markets to Europe has been very mixed, ETC’s data shows, mainly due to the unfavourable exchange rates – in particular, between the US dollar and the euro and pound sterling. Nevertheless, although US outbound travel to Europe grew by only 1% in the first eight months of 2007, according to the Office of Travel & Tourism Industries in the US Department of Commerce, a number of European destinations showed good results out of the USA, according to ETC. And emerging markets such as India and China are starting to fulfil their growth potential.
The vast majority of international arrivals in Europe are, nonetheless, intra-regional and, as highlighted by the results of IPK International’s European Travel Monitor, outbound trip volume by Europeans rose by 3% from January through August 2007, with the growth in short trips (of 1-3 nights) outpacing that of trips of 4+ nights – again, attributable to a higher than average increase in demand for low-cost/no-frills flights.
New leading outbound markets
Interestingly, the 3% rise in outbound trip volume was achieved despite a stagnation in outbound travel demand by Europe’s leading source markets, Germany and the UK – which, together, account for around 35% of total European outbound trips.
“Countries that have traditionally been considered as tourism destinations, such as Spain (+11%) and Italy (+7%), are now becoming leading outbound growth markets,” said Rolf Freitag, President and founder of IPK International and the World and European Travel Monitors. “Russia (+10%) has also continued to outpace the market generally,” said Freitag, “and other secondary markets such as Norway, Ireland and Sweden (all +5%) are performing above average.”
Demand in the first eight months of 2007 was affected by the short winter season at the beginning of the year – and notably, poor snow conditions in many mountain resorts – minor terrorist incidents, and mixed weather patterns during the peak summer season, with floods in Western Europe (especially in the UK) and forest fires in Southern Europe (eg Greece and Italy).
The favourable exchange rates (for markets in the eurozone and the UK) provided a major boost to outbound travel demand, with trips to long-haul destinations growing by 4% as against +2% to destinations in Europe and the Mediterranean basin. As a result, long-haul countries featured strongly in the list of ‘superstar destinations’ – those recording more than 10% growth out of Europe. These included China, Japan, Cambodia, Vietnam and Kenya.
Travel intentions in Europe
Apart from the European Football Championship being hosted by Austria and Switzerland, Europe will not benefit from any important mega-events in 2008. But the results of a special survey by IPK International, in the context of the European Travel Monitor, suggest that 42% of European outbound travellers plan to travel abroad more next year than in 2007. A similar percentage expect to travel “as often”, while only 13% say they will travel less, and just 4% plan no outbound trips at all.
Markets with the highest outbound travel intentions are the UK, Germany, Belgium, Ireland and Norway.
While the Pisa Forum participants believe that outbound travel demand by Europeans may be affected by a possible slowdown in economic growth in 2008, not to mention the credit crunch and the possible fallout from the US sub-prime mortgage crisis, as well as increased concerns about climate change and environmental taxation, the prospects for 2008 remain bright.
“All things considered, we are forecasting another year of growth in the region of 3-4% for the European outbound travel market,” said Freitag. “This will clearly vary quite sharply from one market to another but, in general, we expect long-haul travel to grow faster than travel to short-haul destinations.”