wttc monthly update may 2013

7/28/2019 WTTC Monthly Update May 2013

1/9

Travel & TourismTrends and Economic Impact

May 2013 Monthly Update


2/9

Summary key trends and

developments in Travel & Tourism WTTCs annual economic impact research update, released in March 2013, predicted

a relatively positive outlook for Travel & Tourism GDP growth in 2013, despite acontinuing challenging economic backdrop. Since the annual update release, newdata has been published. Most relevant has been Q1 GDP data, revised GDPforecasts for the whole year, and UNWTO arrivals and receipts data for the first 2-3months of the year. In addition monthly air passenger and hotel data is available, butagain just for the initial months of the year.

Economic growth in Q1 has varied from on-going recession in the eurozone andslowing growth in China, to continued robust growth in the US and stronger thanexpected growth in J apan as a result of monetary stimulus. Overall world GDP is nowforecast to grow slightly weaker in 2013 at 2.2%, with growth downgrades largest forChina, India, Latin America and Italy, and only J apans outlook revised up. YTD worldvisitor arrival growth is in line with expectations at the start of the year, albeit basedon only two months of data. Other Travel & Tourism indicators show steady growth,again broadly in line with expectation from the annual update research.

Next month, as we reach the mid-point of the year, we will consider in more detailwhat impact this and a further months data are likely to have on the world andregional Travel & Tourism outlook for 2013. We will also explore receipts performance

and analyse whether arrivals performance conceals any downward pressure onaverage visitor spending, which would be consistent with the hotel ADR trends.


3/9


4/9

Wider economy update (2) UK: GDP forecast for 2013 has been revised up modestly to 0.9% from 0.7% last

month. A stronger than expected Q1 2013 GDP growth outturn means the UKnarrowly avoided a triple-dip recession, and has set the economy on a better path forthe coming year. This slow but sustained recovery has benefited from a strongservices sector, which contributed the majority of growth in Q1. Overall, the outlookremains upbeat with the latest Purchasing Managers Index (PMI) for services risingto its highest level in 8 months. For Travel & Tourism, the expected weakening ofSterling from $1.46 at the beginning of the year to around $1.60 by the year end,should help boost competitiveness.

Middle East: GDP growth forecast for 2013 in the Middle East remains unchanged at3.5%. However, risks remain to future growth in the form of further civil unrest and theexpectation that oil prices will decline in the next few months.

Africa: Africas 2013 GDP forecast remains unchanged. However, tensions inAlgeria, Mali and Kenya remain a threat and may impact on longer-term tourismarrivals.


5/9

Wider economy update (3) Asia Pacific: Despite weaker than expected GDP growth in China, J apans economy

continues to perform well as its expansionary monetary policy takes effect.

Chinas growth forecast for 2013 has been revised down to 7.5% from 8.2% lastmonth, as rebalancing the economy to encourage consumption has made it moresensitive to movements in consumer expenditure. Nominal retail sales cooled to12.4% in 2013 Q1 compared to 14.5% the previous quarter. Despite this, houseprices have experienced a significant pick up and should this continue, it will play a

role in boosting consumer spending.

J apan has continued its expansionary monetary policy and aim of getting rid ofdeflation and weakening the value of its currency to boost export competitiveness.

The yen has weakened to 100 per US dollar from 78 since the expansionarymonetary policy first started being discussed last October. The J apanese stockmarket too has seen significant gains with the Nikkei 225 increasing by over 65%compared to May last year. However, the strategy still entails some amount of riskshould the government not persist with the policy if early results fail to continue, orinflation could rise too sharply. However, given the early successes of the policy, weexpect J apanese GDP for 2013 to grow by 1.2%, compared to only 1.0% last month,and 0.5% at the time of the annual update research.


6/9

Likely impact on Travel & Tourism

forecasts for 2013 In early March 2013, WTTC launched the results of its 2013 annual economic impact

research. The key messages were:

2012:The global Travel & Tourism industry defied economic uncertainty by out-performing the globaleconomy in 2012, with its direct contribution to GDP growing by 3.2%.

2013:The Travel & Tourism industry is forecast to expand its direct contribution to GDP by 3.1% in 2013,faster than the 2.4% predicted for global economic growth. While the slowdown in Travel & Tourism

international demand growth observed in the second half of 2012 is forecast to continue (as outturn data isconfirming) a growing but slowing trend - this should stabilise given improving macroeconomicconditions and fewer downside risks to the global economy, notwithstanding bumps such as USsequestration.

Next month, as we reach the mid-point of the year, we will consider in more detailwhat impact new economic and Travel & Tourism data for 2013 are likely to have on

the world and regional Travel & Tourism outlooks for 2013.

At th is stage in the year, the current data does not suggest major revisions atwor ld level, though this is partly because of the time lag with data and consequentlythe minimal data available. Revisions at region and major country level are howeverlikely to be more significant.


7/9

Latest Travel & Tourism indicators According to UNWTO Tourism Barometer data published in April, 2013 YTD world

tourist arrivals up to February grew by 3.6%, similar to growth for all of 2012.

At the regional level, YTD arrivals increased in all regions, bar Africa, with growthsurprisingly strong versus expectation again in Europe, following a similar pattern in2012. For most other major regions, visitor growth followed the trend of growing butslowing.

However wi th data only available for two months, it is st ill much too early toread too much into the arrivals and other industry data.

International air passenger traffic annual growth for February, as measured by RPK(revenue per kilometre), was 3.6%, but growth was mixed across regions as reportedlast month. Hotel performance also remains mixed. Although YTD occupancy rategrowth remains positive for most regions, YTD RevPar (revenue per available room)

growth is negative for Europe, Asia-Pacific and Sub-Saharan Africa as a result ofdownward pressure on average daily rates (ADR).

Next month we wil l explore receipts performance from UNWTO TourismBarometer data and analyse whether arrivals performance conceals any

downward pressure on average visitor spending, which would be consistent

with the hotel ADR trends.


8/9

Latest Travel & Tourism indicators

Latest

mon th Feb-

13

2012 2013 (YTD) 20122013 (YTD -

Feb)

Occupancy

rate (2013

YTD - Feb)

ADR (2013

YTD - Feb)

RevPAR

(2013 YTD -

Feb)

Europe 0.8 5.3 1.3 3.3 4.2 2.7 -3.5 -1.0

Americas - - - 3.7 1.1 1.9 3.9 5.8

North America 0.3 1.9 1.0 3.4 2.9 2.0 4.1 6.1

Latin America 7.0 8.7 9.2 4.2 -0.2 - - -

Asia-Pacific 4.5 5.2 2.1 6.8 5.3 -8.1 3.5 -4.8

Middle East 10.6 15.4 12.5 -4.9 4.6 4.6 5.4 10.3

Africa 7.7 7.6 8.6 6.3 -2.1 - - -

North Africa - - - 8.7 -2.4 8.7 -2.9 5.5

Sub-Saharan Africa - - - 5.0 -2.0 7.6 -3.9 3.4

World 3.6 6.1 3.6 3.8 3.6 - - -

YTD performance of airline traffic, international tour ist arr ivals and hotels

(annual % growth)

International air passenger traffic

(RPK)

International tourist

arrivalsRegional hotel performance


9/9

Latest Travel & Tourism indicators

Year to: % Year % Year to: %Austri a Mar 2013 4.2 Canada Feb 2013 0.2 Hong Kong Mar 2013 7.4

Belgium Oct 2012 1.3 US Q1 2013 5.7 South Korea Mar 2013 4.0

Denmark Feb 2013 7.9 Mexico Mar 2013 -1.1 Macau Mar 2013 7.6

Finland Feb 2013 0.3 Chile Mar 2013 1.2 Taiwan Mar 2013 10.7

France J an 2013 -1.8 Angu il la Mar 2013 4.2 India Mar 2013 2.3

Germany Feb 2013 4.3 Anti gua & Barbuda Mar 2013 -1.3 Maldives Mar 2013 14.6

Greece Mar 2013 6.9 Aruba Mar 2013 6.7 Nepal Mar 2013 -3.8

Italy J an 2013 2.3 Bahamas Nov 2012 2.9 Sri Lanka Mar 2013 10.9

Netherlands Dec 2012 3.5 Barbados Mar 2013 -6.5

Portugal Feb 2013 6.3 Bermuda Sep 2012 -1.9 Cambodia Feb 2013 17.5

Spain Mar 2013 2.1 Cayman Islands Mar 2013 8.2 Indonesia Mar 2013 6.0

Sweden Feb 2013 1.3 Cuba Mar 2013 -0.6 Laos Sep 2012 12.0

UK Mar 2013 2.6 Dom Republic Mar 2013 -0.6 Malaysia Sep 2012 0.7

Dominica Oct 2012 2.9 Myanmar Mar 2013 47.1

Bulgaria Mar 2013 7.5 Grenada Feb 2013 -1.0 Papua New Oct 2012 2.8

Cyprus Mar 2013 -10.2 Jamaica Mar 2013 -3.2 Philippines Mar 2013 10.8

Czech Republic Mar 2013 3.0 Martinique Feb 2013 -2.1 Singapore Q2 2012 11.4

Estonia Mar 2013 5.2 Puerto Rico Aug 2012 7.9 Thailand Mar 2013 18.9

Hungary Q3 2012 0.9 St Lucia Mar 2013 2.5 Vietnam Mar 2013 -6.2

Latvia Feb 2013 7.0 St Vincent Oct 2012 0.9 Austra li a Mar 2013 5.4

Lithuania Sep 2012 12.4 British Virgin Q2 2012 1.7 New Zealand Mar 2013 6.1

Malta Feb 2013 2.6 US Virgin Islands Mar 2013 -1.4 Fiji J an 2013 -7.9

Poland Q3 2012 11.2 Bahrain Q2 2011 -38.8 Kiribati Q4 2011 -0.7

Russia Q3 2012 13.1 Israel Mar 2013 -5.5 Tonga Q4 2011 1.1

Slovakia Feb 2013 16.7 Jordan Sep 2012 6.4 Vanuatu Sep 2012 15.7

Slovenia Mar 2013 0.4 Lebanon Mar 2013 -12.5 REGIONAL ESTIMATES (1)

Montenegro Mar 2013 14.3 UAE Sep 2012 10.2 Europe Feb 2013 4.2

Croatia Feb 2013 1.3 Egypt Feb 2013 11.1 Ameri cas Feb 2013 1.1

Iceland Mar 2013 33.2 Mauritius Mar 2013 1.5 Afri ca Feb 2013 -2.1

Norway Mar 2013 6.2 South Africa Jan 2013 -4.1 Middle East Feb 2013 4.6

Switzerland Mar 2013 9.2 Tunisia Mar 2013 -1.6 Asia-Pac ifi c Feb 2013 5.3

Turkey Mar 2013 21.6 Japan Mar 2013 18.0

China Mar 2013 -1.4 WORLD Feb 2013 3.6

(1) based on these 90 countries only; coverage good for Europe, North America, the Caribbean and Asia-Pacific but very limited elsewhere

Source: Oxford Economics , UNWTO

Overnight visitor arrival growth in 2012/2013(% year-on-year, January 2012/2013 to the indicated month)

wttc monthly update may 2013

Documents