ETC Quarterly Report Q2 2017

European Tourism in 2017: Trends & Prospects (Q2/2017)
PEAN
TOURISM 2016
TRENDS & PROSPECTS
APRIL 2016
EUROPEAN TOURISM IN 2017:

TRENDS & PROSPECTS
Quarterly Report (Q2/2017)
A quarterly insights report produced for the Market Intelligence Group

of the European Travel Commission (ETC)
by Tourism Economics (an Oxford Economics Company)
Brussels, June 2017

ETC Market Intelligence Report
1
Copyright 2017 European Travel Commission
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
encourage 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
expression of any opinions whatsoever on the part of the Executive Unit of the European Travel
Commission.
Data sources: This report includes data from the TourMIS database (http://www.tourmis.info), STR
Global, IATA, AEA and UNWTO.
Economic analysis and forecasts are provided by Tourism Economics and are for interpretation by
users according to their needs.
Published and printed by the European Travel Commission

Rue du March aux Herbes, 61, 1000 Brussels, Belgium
Website: www.etc-corporate.org
Email: info@visiteurope.com
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: Mediterranean seascape, Monaco Bay

Image ID: 100122674
Copyright: LiliGraphie
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TABLE OF CONTENTS
Foreword .............................................................. Error! Bookmark not defined.
1. Tourism Performance Summary 2017 ............................................................. 4
2. Global Tourism Forecast Summary ............................................................... 10
3. Recent Industry Performance ........................................................................ 11
3.1 Air Transport ........................................................................................... 11
3.2 Accommodation ...................................................................................... 15
4. Special Feature .............................................................................................. 16

5. Key Source Market Performance ................................................................... 19
5.1 Key Intra-European Markets ................................................................... 19
5.2 Non-European Markets ........................................................................... 23
6. Origin Market Share Analysis......................................................................... 26

6.1 United States........................................................................................... 27
6.2 Canada .................................................................................................... 28
6.3 Mexico ..................................................................................................... 29
6.4 Argentina ................................................................................................. 30
6.5 Brazil ....................................................................................................... 31
6.6 India ........................................................................................................ 32
6.7 China ....................................................................................................... 33
6.8 Japan ...................................................................................................... 34
6.9 Australia .................................................................................................. 35
6.10 United Arab Emirates ............................................................................ 36
6.11 Russia ................................................................................................... 37
7. Economic Outlook .......................................................................................... 38

7.1 Overview ................................................................................................. 38
7.2 Eurozone ................................................................................................. 40
7.3 United Kingdom....................................................................................... 41
7.4 United States........................................................................................... 42
7.5 Japan ...................................................................................................... 43
7.6 Emerging Markets ................................................................................... 44
8. Appendix 1 ..................................................................................................... 47
9. Appendix 2 ..................................................................................................... 49
3
FOREWORD
ENCOURAGING TRENDS SET THE SCENE FOR PEAK SUMMER
MONTHS PERFORMANCE
Early indicators point at another year of rapid growth for European tourism
destinations. Although results are not yet indicative of the full-year
performance, they are in line with the healthy trajectory seen earlier this year.
Tourism demand from intra-regional markets remains crucial for future growth.
However, perceptions of safety and security across Europe will continue to
drive displaced travel and is likely to slow the rate of expansion in the region.
An overwhelming majority of destinations reported growth in visitor arrivals with

An overwhelming majority of more than one in two enjoying a double-digit increase compared to the same
European destinations 1
period the year prior . While, Iceland (+56%) has seen a tourist boom for seven
reported growth in arrivals consecutive years, measures to manage capacity are being considered in the
light of accommodation and local infrastructure constraints. Growth momentum
in the region also mirrors the efforts of destinations to reduce seasonality with
outstanding results observed in Montenegro (+25%) and island destinations,
Malta (+23%) and Cyprus (+18%).
Foreign visits to select destinations

2017 year-to-date*, % change year ago
Source: TourMIS *date varies (Jan-May) by destination
1
Year-to-date data reported by individual destinations varies between January and May.
4
Finland (+18%) and Bulgaria (+17%) also performed well. The former, which is
celebrating 100 years of independence in 2017, saw an upsurge in the flow of
2
Chinese visitors (+81%) helped by improved flight connections and a strong
media exposure in China, whereas the last was seen as a more affordable
alternative for winter breaks. Portugal, Serbia and Croatia (all +15%) owe their
success, among other factors, to improved air connectivity and strong
marketing and promotion efforts. Westwards, in Switzerland, arrivals rose by a
modest +5% maintaining its position as a traditional winter destination. Turkeys
setback (-8%) however, will require significant efforts to restore the inflow of
tourists in the near future due to the perceived safety and security concerns in
the country.
European passenger traffic shows a robust start for the year to date and is
expected to pick up from the slow performance registered in 2016. Revenue
Passenger per Kilometre was up 8.8% the first quarter of the year while load
factor saw an exceptional 84.6% peak flattered by the timing of Easter.
European Passenger Load Factor 2015

Monthly load factor (%), all European routes
90 2016
88 2017
86
84
82
80
78
76
74
72
70
Q1 Q2 Q3 Q4
Source: IATA
The accommodation sector also performed well across the majority of

3
destinations, driving hotel revenues in the region. RevPar growth was 3.9%
4
supported by a 3.4% growth in occupancy and a modest 0.5% raise in ADR .
Despite positive industry indicators, caution must be exercised as ongoing
safety and security challenges may redirect holidaymakers to other European
destinations, having an impact in the overall travel demand.
2
TourMIS
3
Revenue per Available Room
4
Average Daily Rate
5
European source market summary

Destinations reporting growth in arrivals or nights by origin
30
25
20
15
10
5
0
Neth
Russia
France
Japan
USA
India
Germany
Italy
UK
China
Canada
-5
-10
-15
Source : TourMIS, Tourism Economics
DEMAND FOR EUROPEAN DESTINATIONS REMAINS STRONG FUELLED

BY INTRA-EUROPEAN TOURISM DEMAND
The economic picture in the Eurozone looks brighter, helped by a domestic

demand expected to benefit from healthy employment rates and raising wages.
Outbound flows from Europes largest domestic source markets -Germany,
France, Italy, UK- continue to drive intra-regional demand. Travellers from
these markets seem to have changed traditional winter destinations (e.g.
Austria or Switzerland) for more affordable options such as Bulgaria. Although
the falling pound has made travel costs soar for UK travellers, growth in visitor
arrivals from this market was solid. Both Balkan and Baltic destinations -
Bulgaria (+26%), Croatia (+40%), Latvia (+23%), Montenegro and Poland (both
+21%).
Optimism surrounds the Russian outbound travel market as the economy is

expected to rebound alongside the projected recovery of the rouble, solid oil
prices and higher wages which are likely to boost household consumption. All
reporting destinations saw encouraging figures in Russian travel demand,
though they still do not fully offset the large falls registered in 2015 and 2016.
Volume from this market to Turkey is expected to surge as relations between
both countries are improved. Strong growth in demand continues to come
mainly from Europes main long-haul source markets US and China. In the
US, the relative strength of the dollar, the accelerated economic growth and
decreasing air fares have contributed to the strong performance of this market;
US arrivals to Europe is projected to grow +6% per year on average through
2021. Travel flows from China and Japan to European destinations was weaker
than overall outbound growth from those markets affected by perceptions of
safety and security across the region. However, both markets are expected to
have increased 14% and 5% respectively so far in 2017. Meanwhile, looking at
demand from the Middle East, no major impacts are expected for European
destinations year to date concerning travel disruption due to the blockade
5
imposed on Qatar by its neighbours (Saudi Arabia, UAE, Egypt and Bahrain) .
5
https://www.theguardian.com/world/2017/jun/06/qatar-panic-buying-as-shoppers-stockpile-food-due-to-saudi-blockade
6
CAPITALISING ON THE REGIONS VAST OFFERING IS KEY TO ENSURE

SUSTAINED GROWTH
The beginning of 2017 saw significant turbulence in the worlds premiere tourist
destination: Brexit, terrorism-related disruption, political volatility and
uncertainties, etc. which have failed to dim the regions appeal. Europe
continues to lure millions of international travellers (615 million international
6
tourist arrivals in 2016 ) confirming the tourism sectors resilience to safety and
security shocks and geopolitical uncertainty. As seen from the Long-Haul
7
Travel Sentiment Index , Europes well-known destinations continue to have
the potential to fuel the interest of long-haul travellers in 2017. Independently
of a stable European domestic market, growth is also driven by long-haul
source markets. Cheap oil prices, favourable currency exchanges, raising
middle classes coupled with improved air connectivity and travel facilitation, are
contributing significantly to the surge of outbound travel to Europe, said
Eduardo Santander, Executive Director European Travel Commission (ETC).
Jennifer Iduh (ETC Executive Unit)

with the assistance of the ETC Market Intelligence Group
6
UNWTO
7
LHTSI: The Long-Haul Travel Sentiment Survey captures peoples intention to travel abroad, their motivations and barriers to
travel, as well as key characteristics of their trip
7
TOURISM PERFORMANCE SUMMARY

2017
Data for 2017 to date point to yet another good year for European tourism. The
majority of European countries have posted year-to-date results for the first
three or four months of the year with Cyprus and Croatia reporting up to May.
Data indicate some strong growth during this period. Of the 30 countries, 28
have reported either arrivals or overnights growth and thirteen have reported
double digit growth.
28 Foreign visits and overnights to select destinations Arrivals

2017 year-to-date*, % change year ago
The number of Nights
30
European destinations
reporting growth in 2017 to 25 Iceland, 55.7% (A)
Switzerland, -55.4% (N)
date 20
30 destinations have 15
reported on tourism 10
performance in 2017
5
0
Montenegro
Portugal
Denmark
Norway
Austria
Turkey
Malta
Hungary
Serbia
UK
Poland
Lithuania
Slovakia
Iceland
Cyprus
Croatia
Spain
Switzerland
Germany
Sweden
Slovenia
Netherlands
Finland
Ireland Rep
Czech Rep
Bulgaria
Romania
Latvia
Luxembourg
Estonia
-5
-10
Growth in Iceland shows no sign of slowing with growth of 55.7% in the first
four months of 2017 compared to the same period in 2016. It has been the top
performing European growth destination since 2012 and early indications for
2017 point to another year of rapid expansion. Growth has averaged over 25%
per annum over the past five years and was 40% in 2016. However, a
slowdown is still expected in the medium term as accommodation capacity and
other tourism infrastructure constraints begin to bite.
Malta and Cyprus also enjoyed a strong start to the year with arrivals growth of
22.9% and 17.6% in the first months of the year. In both those cases, 2016
growth was in double-digit territory and this momentum has carried through into
2017. For destinations with a high dependency on peak summer demand,
growth outside this period is indicative of a welcome reduction in seasonality.
Growth in both destinations was broad-based in terms of source market mix.
Finland has so far enjoyed strong growth from a range of source markets, but
there have been especially large increases in Chinese arrivals relative to the
comparable period in 2016. A similarly large influx in Chinese visitors was also
reported in Estonia and both destinations may be benefiting from an increase in
tours from long-haul markets.
Switzerland reported a growing number of arrivals based on data to April, up

4.9% compared to the same period in 2016. However, these gains were
8
reportedly offset by substantial decline in the number of overnights - down

55.4%. This fall is not reflected in hotel occupancy data and may be due to a
change in methodology for measurement. But relatively weak performance
reflects why the Swiss National Bank desires a depreciation of what it
considers a heavily overvalued Swiss franc which has hit labour-intensive
sectors, such as tourism and consumer services.
Turkey started 2017 following the same downward spiral that began in 2015.
Total arrivals data are only currently reported for the year to February and were
8.1% lower compared to the same period in 2016. Moderate growth is expected
for the remainder of the year but a period of political stability and no terrorism
activity will be required before recovery can truly begin.
Tourism Performance, 2016 Year-to-Date

International Arrivals International Nights
Country % ytd to m onth % ytd to m onth
Austria 2.5 Jan-Apr 1.2 Jan-Apr
Bulgaria 16.7 Jan-Apr
Croatia 14.8 Jan-May 10.1 Jan-May
Cyprus 17.6 Jan-May -0.8 Jan-Mar
Czech Rep 9.0 Jan-Mar 7.4 Jan-Mar
Denmark 5.8 Jan-Apr
Estonia 10.5 Jan-Apr 7.6 Jan-Apr
Finland 18.3 Jan-Apr
Germany 4.8 Jan-Apr 3.2 Jan-Apr
Hungary 11.4 Jan-Apr 13.4 Jan-Apr
Iceland 55.7 Jan-Apr
Ireland Rep 1.7 Jan-Apr
Latvia 6.7 Jan-Mar 5.9 Jan-Mar
Lithuania 6.5 Jan-Mar 5.3 Jan-Mar
Luxembourg 5.4 Jan-Apr
Malta 22.9 Jan-Apr 12.4 Jan-Apr
Montenegro 25.1 Jan-Apr 20.2 Jan-Apr
Netherlands 3.7 Jan-Mar -1.8 Jan-Mar
Norw ay -7.2 Jan-Apr
Poland 8.5 Jan-Mar 8.3 Jan-Mar
Portugal 15.4 Jan-Apr 13.3 Jan-Apr
Romania 8.8 Jan-Apr
Serbia 15.1 Jan-Apr 11.7 Jan-Apr
Slovakia 6.1 Jan-Mar 3.4 Jan-Mar
Slovenia 7.0 Jan-Mar 5.2 Jan-Mar
Spain 11.6 Jan-Apr 11.8 Jan-Apr
Sw eden 8.2 Jan-Apr
Sw itzerland 4.9 Jan-Apr -55.4 Jan-Apr
Turkey -8.1 Jan-Feb
UK 11.0 Jan-Apr
Source: TourMIS, http://w w w .tourmis.info; available data as of 30.1.2017
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values
9
1. GLOBAL TOURISM FORECAST

SUMMARY
Tourism Economics global travel forecasts are shown on an inbound and outbound basis in the
following table. These are the results of the Tourism Decision Metrics (TDM) model, which is updated
in detail three times per year. Forecasts are consistent with Oxford Economics macroeconomic
outlook according to estimated relationships between tourism and the wider economy. Full origin-
destination country detail is available online to subscribers.
TDM Visitor Growth Forecasts, % change year
Inbound* Outbound**
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
data/estimate/forecast *** d d e f f d d e f f
World 4.1% 4.4% 3.6% 4.5% 4.6% 3.3% 4.1% 4.1% 4.1% 4.3%
Americas 8.6% 6.0% 4.3% 2.9% 3.7% 7.4% 5.2% 3.3% 3.3% 3.4%
North America 9.7% 5.5% 4.0% 2.1% 2.8% 8.3% 4.5% 4.3% 3.9% 3.4%
Caribbean 5.3% 8.1% 4.0% 4.1% 4.7% 9.6% 15.6% 7.1% 5.6% 4.8%
Central & South America 6.9% 6.4% 5.4% 4.6% 5.9% 4.1% 7.0% -0.5% 0.8% 3.4%
Europe 1.8% 4.6% 1.6% 4.1% 4.0% -0.3% 2.6% 3.0% 3.5% 3.8%
ETC+4 4.1% 4.8% 2.0% 4.1% 3.8% 2.2% 4.4% 4.2% 3.3% 3.8%
EU 4.0% 5.2% 4.4% 4.1% 3.7% 1.9% 4.2% 4.4% 3.3% 3.7%
Non-EU -6.1% 2.1% -10.1% 4.3% 5.3% -8.4% -4.3% -3.5% 4.4% 4.4%
Northern 5.1% 6.3% 6.6% 4.5% 2.6% 5.1% 7.5% 6.5% 0.5% 2.9%
Western 2.1% 3.4% -1.0% 2.7% 3.8% -1.3% 1.1% 2.6% 4.0% 3.8%
Southern/Mediterranean 7.1% 4.9% 1.2% 4.5% 4.6% 6.2% 7.6% 3.5% 4.1% 3.7%
Central/Eastern -8.8% 5.2% 2.7% 5.2% 4.2% -5.2% -3.1% -0.7% 5.5% 4.9%
- Central & Baltic -0.5% 7.4% 7.8% 5.4% 2.8% 5.2% 6.8% 6.5% 6.8% 5.4%
Asia & the Pacific 5.3% 5.6% 8.4% 5.8% 5.8% 6.6% 7.0% 7.4% 5.9% 5.7%
North East 7.3% 4.3% 8.6% 5.2% 5.0% 8.3% 8.2% 7.3% 6.7% 5.9%
South East 2.9% 7.8% 8.1% 6.8% 7.3% 3.0% 4.9% 8.8% 5.4% 6.4%
South 9.8% 3.4% 11.5% 7.4% 6.2% 14.0% 9.1% 5.1% 6.1% 5.4%
Oceania 6.1% 7.2% 9.0% 5.3% 4.7% 3.9% 4.0% 5.5% 3.2% 4.4%
Africa 2.7% -5.1% -1.3% 6.0% 6.0% 5.0% 2.5% 0.0% 4.0% 4.8%
Mid East 9.7% 2.2% 3.2% 5.1% 5.5% 9.6% 1.2% 2.8% 4.0% 5.2%
* Inbound is based on the sum of the country overnight tourist arrivals and includes intra-regional flows
** Outbound is based on the sum of visits to all destinations
The geographies of Europe are defined as follows:
Northern Europe is Denmark, Finland, Iceland, Ireland, Norway, Sweden, and the UK;
Western Europe is Austria, Belgium, France, Germany, Luxembourg, Netherlands, and Switzerland;
Southern/Mediterranean Europe is Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR Macedonia, Greece,
Italy, Malta, Montenegro, Portugal, Serbia, Slovenia, Spain, and Turkey;
Central/Eastern Europe is Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan,
Kyrgyzstan, Latvia, Lithuania, Poland, Romania, Russian Federation, Slovakia, and Ukraine;
Central & Baltic Europe is Bulgaria, Czech Repub lic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania,
and Slovakia;
ETC+4 is all ETC members plus France, the Netherlands, Sweden, and the United Kingdom
Source: Tourism Economics
10
2. RECENT INDUSTRY PERFORMANCE

INDUSTRY PERFORMANCE REMAINS STRONG
Passenger growth in 2017 has continued in line with the solid growth seen in 2016.
A strong dollar continues to aid outbound growth from the Americas but growth is
beginning to slow.
Asian travel to Europe has been recovering following some safety concerns.
Hotel occupancy has continued to rise in early 2017 in most European countries and
across all European regions. However, Northern Europe has witnessed a fall in ADR
and RevPAR.
2.1 AIR TRANSPORT
Global RPKs grew by 7.9% so far this year compared to the same period in
7.9% 2016. This is equivalent to growth of around 8.7% adjusting for the extra day in
The rate of World RPK 2016 due to the leap year. This is comfortably above the average annual
growth in 2017 to date growth rate of the past 10 years (5.2%).
YTD growth based on data This higher demand was helped by a combination of a broad-based pick-up in
to April global economic conditions alongside lower airfares as lower fuel prices
continue to be passed onto travellers. Adjusting for inflation, the price of air
travel in the first quarter of 2017 was around 10% lower than a year ago.
Annual International Air Passenger Growth 2015

% year, RPK
2016
12
2017
10
0
Africa Asia/Pacific Europe Latin Mid. East N. America World
America
Source: IATA
Year-to-date RPK growth was strongest in Asia/Pacific based on data to April

as air passenger demand to, from and within the region grew by 10.1%. Growth
associated with the Chinese New Year holiday was especially strong in
January but has since moderated. If RPK growth of this magnitude can be
11
maintained throughout the remainder of the year, 2017 would be the fastest
growth year of the past decade, exceeding even the post-recession rebound in
2010.
Continued expansion in Asia/Pacific passenger demand will be facilitated by

capacity growth. Both Indian and Chinese airlines have increased the number
of airport-pairs they serve which has reduced journey times for passengers and
stimulated demand alongside a reduction in fares. Traffic on Asia-Europe
routes has continued to recover strongly, having been affected by terrorism-
related disruption in early 2016.
Monthly International Air Passenger Growth Jan-17

% year, RPK
Feb-17
18
Mar-17
16
14 Apr-17
12
10
8
6
4
2
0
-2
Africa Asia/Pacific Europe Latin Mid. East N. America World
America
Source: IATA
RPK growth has also been notable in the Middle East in early 2017 at 9.1%,
although this is the slowest rate of growth the region has seen in five years.
The Trump Administrations ban on personal electronic devices (PEDs), passed
in the second half of March, may be having an impact on traffic along with
some disruption from the proposed ban on inbound travel to the US which is
likely to be affecting sentiment and demand.
Capacity growth within the Middle East has continued to outstrip demand and
passenger load factor (PLF) hit its lowest value of the past decade in
November 2016 and data for 2017 show PLF to have been lower than every
other region with the exception of Africa.
In Europe, RPK growth was 8.8% in the first four months of 2017. This follows
a marked pick-up in growth in the second half of 2016. In April RPK growth was
14% higher than in 2016. However, this was largely due to the timing of Easter
while safety concerns were seemingly on the wane with corresponding
improvements in passenger growth. But the more recent spate of high-profile
attacks in March through to June, may lead to further disruption and
displacement within the region.
In Africa RPKs grew by 8% in April and there is little to suggest this will slow. It
follows a recovery in the trend on the key market to and from Europe.
Nevertheless, conditions in the regions two largest economies are diverging:
business confidence in Nigeria has risen since late 2016 while political
uncertainty remains heightened in South Africa.
12
In Latin America year-to-date RPK growth was 6.6% lower than long run
average growth going back to 2003. Recessions in Argentina, Brazil and
Venezuela continue to offset demand growth elsewhere in the region and air
demand is likely to remain sluggish (relative to the long run average)
throughout 2017. Both business and leisure-related travel are suffering. In the
case of Brazil, last summers Olympic Games in Rio de Janeiro provided
temporary respite, while recoveries in Venezuela and Argentina remain a
distant prospect.
North American traffic grew by 3.4% in the first four months of the year, with a
notable pick-up in April. This reflects a combination of the comparatively robust
economic backdrop as well as the strength of the US dollar which continues to
support outbound passenger demand.
International Air Passenger Traffic Growth Total

% year, RPK
20 3mth mav
15
10
-5
-10
-15
Jul-08
Jan-11
Jun-11
Jul-13
Mar-15
Jan-16
Jun-16
Mar-10
Feb-08
Feb-13
Sep-07
Dec-08
Aug-10
Nov-11
Sep-12
Dec-13
Aug-15
Nov-16
May-09
Apr-07
Oct-09
Apr-12
May-14
Oct-14
Apr-17
Source: IATA
Aviation capacity within Europe continued to rise in early 2017 as a

continuation of growth in 2016 which will allow any further demand growth to be
realised in 2017.
European Aviation Capacity

ASK, monthly average on all European routes, % change year ago
9
8
7
6
5
4
3
2
1 2015 2016 2017
0
-1
Q1 Q2 Q3 Q4
Source: IATA
13
Airline load factors eased throughout 2016 compared with 2015 with a
85% reduction throughout the year apart from in December when demand growth
allowed an increase in load factor. Improvement continued in early 2017 with
Peak of European airline an average 81.4% compared to 78.9% in 2016 and 79.4% in 2015. Load factor
passenger load factor in in April was exceptionally high at 84.6% but this was primarily attributable to the
2017 to date timing of Easter.
Based on data to April European Passenger Load Factor 2015

Monthly load factor (%), all European routes
90 2016
88 2017
86
84
82
80
78
76
74
72
70
Q1 Q2 Q3 Q4
Source: IATA
Recent data from IATA show that air travel on Asia-Europe routes has picked
up in 2017 as a rebound from weak demand in 2016 related to fears regarding
terrorist attacks as well as some slowdown in emerging markets. This was
particularly true in the case of travel to France where around 40% fewer
Japanese and 20% fewer Chinese arrivals were reported (not available through
TourMIS). The impact on overall passenger numbers suggests potential
tourists were not just being redirected to other European destinations but that
there is an impact on overall demand.
Air travel on routes between North America and Europe has stagnated in 2017
to date partly due to some reduced travel from Europeans due to the stronger
US dollar, but also due to the proposed implementation of some draconian
immigration policies (and risk of trade barriers). This also offsets some faster
growth in 2016 as United States outbound travel to Europe benefited from the
relative strength of the dollar against key European currencies as well as
favourable economic conditions in the United States.
Passenger yields are bottoming out, driven by upward pressure both on fuel
and non-fuel costs, as well as the stronger demand backdrop itself. With the
large stimulus to demand from lower oil prices now seemingly behind us, the
strength of the economic backdrop is likely to be the key driver of passenger
demand in the near term. While business confidence indicators remain at levels
consistent with solid economic growth, the upward trend in confidence looks to
have paused, especially for the services sector.
14
2.2 ACCOMMODATION
Globally, accommodation performance has been positive so far in 2017 based

on data to May. The poorest performing global region in terms of occupancy
was the Americas (+0.7%). In spite of this, ADR was up 5.2% resulting in
RevPAR growth of 5.9%.
Global Hotel Performance Occ

Jan-May year to date, % change year ago
ADR ()
7
RevPAR ()
6
0
Asia/Pacific Americas Europe Middle East/Africa
Source: STR Global
In Asia/Pacific occupancy was up 2.8% compared to the same period in 2016

which was achieved with a simultaneous increase of ADR in the region, at least
when denominated in local currency. As a result, RevPAR grew by 4.5% in
euro terms.
Across Europe, accommodation performance was largely positive with RevPAR

3.4% growth of 3.9% for the region as a whole comprised of occupancy growth of
3.4% while ADR rose just 0.5% (priced in euros). Occupancy performance lags
Occupancy growth across
the international arrivals growth due to some offsetting growth in supply and a
Europe in 2017
further drag from domestic demand in some countries.
Based on data to May European Hotel Performance Occ

Jan-May year to date, % change year ago
ADR ()
25
RevPAR ()
20
15
10
-5
Europe Eastern Northern Southern Western
Europe Europe Europe Europe
Source: STR Global
15
3. SPECIAL FEATURE
POTENTIAL IMPACTS OF TERRORISM IN 2017
2016 saw a spate of terrorist attacks across a number of European cities with
European tourism
spillover impacts onto regional tourism performance due to heightened security
performance in 2016 was
concerns. A partial rebound was expected in 2017 as concerns eased following
affected by safety and
the usual pattern of recovery from disruptive events. However, more recent
security concerns.
activity may undermine this recovery for destinations across the region.
The perceived risk to traveller safety is a crucial factor driving the overall impact
on specific destinations and the wider region. Prior analysis showed that cities
which were hit by multiple attacks and over a longer period of time were
associated with a higher perceived risk and larger falls in travel. For example,
Brussels suffered a larger fall in demand than Munich in 2016.
Perceived safety risks are not limited to just the affected cities as travel to other
destinations within those countries were also affected in 2016. Wider impacts
were felt across the region and some continued impact is expected in 2017.
For Europe as a whole, two distinct impacts have been evident on travel:
displaced travel provides a benefit to some other destinations; while a
proportion of potential travellers have avoided European destinations
altogether.
Some unaffected Spain has apparently gained from recent events taking a greater share of
destinations will continue to European arrivals in 2016 with relatively strong arrivals growth. This is
benefit from displaced travel. particularly evident for travel from long-haul markets which have been among
the most erratic. France and Turkey typically account for a large proportion of
travel to Europe from long-haul markets. Turkeys share of regional demand fell
in 2016 while the proportion of this travel to Spain rose significantly.
Destination share of long-haul travel to Europe France

% share of European arrivals from long-haul markets
Spain
16%
Turkey
14% United Kingdom
12%
10%
8%
6%
4%
2%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Tourism Economics' TDM database, UNWTO
Some unwinding of this is expected in 2017, with some fall in the share of travel
to Spain offset by an increase in the share of travel to Turkey. However, a
return to pre-2016 shares is not expected with some lingering concerns among
16
potential tourists. This is evident in data for the start of 2017 which show growth
in travel to these markets, albeit not sufficient to fully offset prior falls.
Travel to the UK will also be impacted in 2017, following attacks in London and
Manchester. However, the UK has been benefiting from increased demand due
to higher affordability from the weaker pound and gained some share of
European demand in 2016, which will partly offset a negative impact in 2017.
The UK is also expected to follow the example of France with only a gradual
loss of regional share, helped by a larger proportion of business travel which
will remain more stable.
In addition to the internal displacement, Europe as a whole has suffered some

Europe has lost share of overall loss in demand as a proportion of travellers avoided the region
demand from long-haul altogether. This is most notable from some long-haul Asian markets. European
markets, notably from Asian destinations lost share of both the Chinese and Japanese markets in 2016.
markets. Perceptions may be exacerbated by travel itineraries on tours covering multiple
countries and a view of the region as a single entity.
The fall in the proportion of Japanese travel demand to Europe was especially
sharp in 2016, and only a slow recovery is expected. By contrast the fall in the
share of Chinese demand was not quite as sharp as in initial estimates, but
there was still a noticeable loss of share. Some rebound in the share of travel
heading to Europe from these markets is still expected in 2017, but this will be
slower than in prior forecasts as some concerns will linger. This is consistent
with the arrivals growth in early 2017, but also implies some slower growth later
in the year.
European market share of long-haul markets USA

European destinations' share of outbound, 2012=100
China
115
Japan
110
105
100
95
90
2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: TDM, UNWTO
Travel from the US has remained more resilient, partly supported by increased
affordability due to the strength of the US dollar. This may also be due to some
greater familiarity with European destinations and an understanding of the true
risks involved in travel.
European destinations need to ensure they project a clear image of the diverse
destinations available and provide reassurances regarding safety to maximise
recovery from the current low market share.
17
TRAVEL DISRUPTION DUE TO QATAR BLOCKADE
Global travel in 2017 is also being disrupted by the blockade of travel to Qatar
Impacts of the blockade will due to political tensions, including some small impact on travel to Europe. This
fall mainly on Qatar itself, but will come through travel flows via the Gulf region, and particularly from Asian
a swift resolution is currently markets, adding to potential security concerns from terrorism.
expected.
The blockade affects all travel to Qatar by land, some regional air travel, and
crucially limits the airspace available for flights to the country. The immediate
consequence of this is that flights to, or via, Qatar involve longer travel times. A
reduction in capacity may ultimately increase prices on these routes. Higher
travel times and prices will both influence passenger demand.
The amount of European demand potentially affected by the blockade is

relatively small as around one-fifth of travel from Asia to Europe is via hubs in
the Gulf region, according to data from IATA. Within that, around 5% of travel
from Asia to Europe comes via Qatar itself as a hub.
Any reduction in Asian travel to Europe via Qatar can be partly absorbed by
Asian travel to Europe via
increases on other routes, but some proportion will also be deferred or even
Qatar as a hub may be
cancelled. The duration of the blockade will affect the impact and a relatively
disrupted.
swift resolution remains part of Tourism Economics central outlook including
minimal impact on hub operations, but some longer effects evident on travel
within the Middle East region.
The travel volumes which are potentially affected are small, but events could
undermine some of the expected growth from the largest Asian markets.
Notably, China is expected to account for 5% of European arrivals growth in the
coming years, with some further contribution from other emerging Asian
markets. This is at risk, but intra-regional European travel remains crucial for
future growth and should be unaffected.
Contributions to European growth by market

2016-20; expected share of arrivals growth for European
destinations by source markets
Canada 1%
India 1%
Japan 1%
Italy 4%
Russia 4%
China 5%
Other non-EU 6%
UK 7%
Neth 8%
France 8%
USA 9%
Germany 12%
Other EU 35%
0% 5% 10% 15% 20%

18
4. KEY SOURCE MARKET

PERFORMANCE
GROWTH CONTINUES INTO 2017
European travel demand continues to grow across the majority of destinations and
from a range of source markets.
Intra-European travel remains crucial for future growth.
Recent spate of high-profile terror attacks in Europe a near-term concern.
Trends discussed in this section in some cases relate to the first five months of the year although
actual coverage varies by destination. For the majority of countries April will be the latest available
data point. Further detailed monthly data for origin and destination, including absolute values, can be
obtained from TourMIS, http://tourmis.info.
4.1 KEY INTRA-EUROPEAN MARKETS
Many European destination countries experienced strong growth in tourism

from Germany. Iceland, Cyprus and Bulgaria all enjoyed arrivals growth in
excess of 35%. In the case of Bulgaria, growth represented continuation of a
pick-up which has been gathering steam since August 2016. As German
16 arrivals typically account for 10% of all arrivals to Bulgaria growth of this
magnitude represents a substantial number of new arrivals. It may be that they
out of 27 destinations are opting for more affordable winter destinations at the expense of traditional
reported arrivals growth from destinations such as Austria and Switzerland. German arrivals and overnights
Germany pointing to to Austria and overnights to Switzerland are all lower in 2017 compared to the
continued intra-regional same months a year ago. There was a continued small fall in German arrivals
growth in 2017 in Turkey and, perhaps more surprisingly, in arrivals in Croatia.
German visits and overnights to select destinations Arrivals

2017 year-to-date*, % change year ago Nights
50
40 Iceland, 82.3% (A)

30 Turkey, -30.5% (A)
20
10
0
Montenegro
Denmark
Norway
Austria
Turkey
Malta
Portugal
Lithuania
Hungary
Slovakia
Poland
Cyprus
Serbia
Spain
Iceland
Sweden
Switzerland
Netherlands
Croatia
Luxembourg
Slovenia
Finland
Czech Rep
Bulgaria
Romania
Latvia
Estonia
-10
-20
19
Iceland enjoyed an 86.6% rise in Dutch arrivals in the first four months of 2017.
However, in terms of overnights, Lithuania had the highest increase from Dutch
travellers, up 142.7% based on data to March. This may have been driven by
new air routes to Kaunas which began operations during this period. Malta saw
60% growth in arrivals and 66.4% growth in overnights in the first four months
of 2017. Denmark also benefited from some handsome overnights growth from
the Netherlands (+42%) based on data to April, as did Hungary (+22.0%).
Dutch visits and overnights to select destinations Arrivals

70 Lithuania, 142.7% (N)
60 Iceland, 86.6% (A)
Bulgaria, 70.1% (A)
50 Switzerland, -62.1% (N)
40
30
20
10
0
Norway
Austria
Malta
Denmark
Portugal
Montenegro
Turkey
Lithuania
Poland
Slovakia
Germany
Cyprus
Hungary
Serbia
Croatia
Spain
Slovenia
Iceland
Finland
Czech Rep
Switzerland
Sweden
Luxembourg
Bulgaria
Romania
Latvia
Estonia
-10
-20
-30
The disruption from terrorist attacks continues to affect France as a destination

but, importantly, not as a source market. French travel behaviour seems now to
have normalised. Iceland and Cyprus both experienced arrivals growth in
excess of 50% based on early 2017 data, and seven other destinations have
reported double-digit arrivals growth. Switzerland continued to register
contractions in both arrivals and nights from French tourists.
French visits and overnights to select destinations Arrivals

70
60 Norway, -13.1% (N)
Turkey, -23.6% (A)
50
40
30
20
10
0
Austria
Norway
Malta
Montenegro
Portugal
Denmark
Turkey
Lithuania
Poland
Spain
Cyprus
Hungary
Germany
Iceland
Croatia
Serbia
Netherlands
Slovakia
Slovenia
Sweden
Czech Rep
Finland
Switzerland
Luxembourg
Bulgaria
Romania
Latvia
Estonia
-10
Iceland was also the top growth destination from Italy according to early 2017
data. Although growth was based on some relatively small volumes, Italian
arrivals to Iceland grew by 158.4% in the first four months of 2017 compared to
20
2016. Eleven countries enjoyed double-digit growth in arrivals. However, for

only three of these destinations growth was in excess of 20%. Iceland aside,
growth to Bulgaria was most notable at 41.9%. Travel to Austria and
Switzerland fell but so too did visits to some competitor winter destinations
such as Slovenia and Slovakia.
Italian visits and overnights to select destinations Arrivals

50
40 Iceland, 158.4% (A)

Turkey, -31.3% (A)
30
20
10
0
Malta
Portugal
Denmark
Montenegro
Poland
Germany
Austria
Turkey
Croatia
Hungary
Serbia
Netherlands
Slovakia
Spain
Lithuania
Cyprus
Switzerland
Slovenia
Iceland
Sweden
Luxembourg
Bulgaria
Czech Rep
Finland
Latvia
Romania
Estonia
-10
-20
24 out of 29 reporting destinations have reported some form of growth from the
UK so far in 2017. Fourteen destinations enjoyed arrivals growth in excess of
10%, with growth in five destinations in excess of 20%. Growth from the UK
has largely continued despite a weaker pound which has made international
travel more expensive. But effects may be more evident as 2017 progresses
further since travel behaviour often lags price movements due to advanced
bookings.
Arrivals and overnights from the UK to Croatia, the top growth market, were
also up significantly (40.2% and 40.3% respectively, based on data to May).
The growing number of flights between UK cities and a number of Croatian
destinations has played a major role in this growth. Bulgaria, Latvia,
Montenegro and Poland all saw arrivals growth in excess of 20%.
On the downside, Ireland has reported an 8.3% decline in the number of UK

arrivals it welcomed in the first four months of the year compared to last. Given
that UK arrivals account for roughly half of all arrivals to Ireland, this is a
significant blow to Irelands tourism economy in absolute terms.
21
UK visits and overnights to select destinations Arrivals

50

30
20
10
0
Montenegro
Austria
Norway
Portugal
Malta
Denmark
Turkey
Lithuania
Spain
Germany
Croatia
Poland
Serbia
Slovenia
Iceland
Cyprus
Slovakia
Hungary
Luxembourg
Netherlands
Finland
Czech Rep
Switzerland
Ireland Rep
Sweden
Bulgaria
Latvia
Romania
Estonia
-10
-20
-30
Outbound travel from Russia should improve as 2017 progresses in line with
26 the expected recovery of the rouble. This follows growth in year-to-date data
which show that a majority of reporting destinations have experienced a
out of 28 destinations rebound from the lower Russian demand to 2016. Iceland was the top growth
reported growth in arrivals or destination, up 164.0% in the first four months of 2017, albeit from a relatively
overnights from Russia. low volume.
Russian travel to Turkey continued to increase. This growth followed some mild
improvement in the latter part of 2016 after Russia lifted travel restrictions on its
citizens visiting Turkey and notable efforts have been made to restore relations
between the two countries. Moscow hosted this years Turkey Festival in June
in an attempt to woo Russian visitors back to Turkey. As with some other
source markets, Russian arrivals to Switzerland increased compared to 2016
but overnights have plunged.
Russian visits and overnights to select destinations Arrivals

50
40 Iceland, 164.0% (A)

Turkey, 88.2% (A)
20
10
0
Turkey
Portugal
Malta
Montenegro
Denmark
Norway
Netherlands
Hungary
Slovakia
Poland
Germany
Austria
Slovenia
Cyprus
Croatia
Serbia
Lithuania
Iceland
Finland
Spain
Switzerland
Sweden
Luxembourg
Czech Rep
Estonia
Bulgaria
Latvia
Romania
-10
-20
22
4.2 NON-EUROPEAN MARKETS
26 out of 28 reporting destinations enjoyed growth from the US in 2017 to date.
26 Iceland remains the fastest growing destination for US travellers up 92.2%

based on data to April. Growth of this magnitude is very significant since
out of 28 destinations arrivals from the US account for around 20% of the total for Iceland so it is not
reported growth from the a case of a large percentage increase from a low base. Growth continues to be
United States aided by Icelands role as a hub for transatlantic travel as both Europeans and
North Americans have been increasingly breaking up transatlantic trips with
some nights in Iceland. This pace of growth is well ahead of the increase in
transatlantic travel and Iceland is gaining share of this market, which will
continue to be supported by further planned growth in scheduled seats on
flights on these routes.
Spain welcomed 46.1% more arrivals from the US based on data to April
compared to a year ago. US growth to Serbia was also substantial at 43.1%
also based on data to April. Overnights growth to Sweden was also notable
(+39.3%) but Aprils terror attack in Stockholm may see this growth peter out.
Meanwhile, Turkey has continued to see lower arrivals from the US due to a
combination of political unrest and recurrent terror attacks. Estonia has also
experienced a fall in American arrivals compared to 2016.
US visits and overnights to select destinations Arrivals

50
40 Iceland, 92.2% (A)

30 Turkey, -33.0% (A)
20
10
0
Norway
Portugal
Denmark
Montenegro
Austria
Turkey
Croatia
Slovakia
Poland
Serbia
Cyprus
Malta
Lithuania
Slovenia
Hungary
Spain
Netherlands
Switzerland
Luxembourg
Germany
Iceland
Sweden
Latvia
Finland
Czech Rep
Romania
Bulgaria
Estonia
-10
-20
Japan presents a far more mixed picture than other source markets consistent
with recent sluggish growth. Strong growth in arrivals has been reported by
Portugal, Spain and Iceland while significant falls are evident in some Eastern
European countries including Turkey. This is in spite of some strengthening of
the yen in 2016 through 2017, notably following the Brexit referendum and
more recently amid geopolitical tensions, aiding affordability for Japanese
travellers.
Growth has been notable in a number of destinations with six reporting double-
digit growth (albeit from relatively low bases and with Portugal and Spain
having the highest arrivals growth). The robust growth in travel to traditionally
expensive Finland might have been viewed as an indication that price
pressures are becoming less of a constraint on Japanese travellers. However,
the very marked fall in nights in Switzerland (-48.0%) could also suggest that
23
some price pressures remain. It is also notable that whilst arrivals in Spain from
Japan were up 42.6%, overnights still fell slightly.
Japanese visits and overnights to select destinations Arrivals

50
40
Portugal, 50.5% (A)
20
10
0
Austria
Norway
Portugal
Montenegro
Denmark
Turkey
Lithuania
Hungary
Slovakia
Spain
Germany
Serbia
Iceland
Switzerland
Croatia
Netherlands
Poland
Slovenia
Luxembourg
Sweden
Finland
Latvia
Czech Rep
Romania
Bulgaria
Estonia
-10
-20
-30
-40
China has been a source of notable arrivals growth for many European
destinations so far in 2017, with growth in all but two of 25 reporting
destinations. Serbia was the top growth destination on an arrivals basis
(+166.6%) whilst Montenegro was the top on an overnights basis (+140.9%).
Iceland and Poland were also favoured by Chinese tourists in growth terms in
the first months of 2017.
Chinese visits and overnights to select destinations Arrivals

100
80 Serbia, 166.6% (A)

Montenegro, 140.9% (N)
60
40
20
0
Montenegro
Norway
Austria
Portugal
Turkey
Denmark
Serbia
Poland
Lithuania
Slovakia
Germany
Netherlands
Iceland
Croatia
Hungary
Spain
Cyprus
Slovenia
Sweden
Finland
Czech Rep
Switzerland
Latvia
Luxembourg
Estonia
Bulgaria
Romania
-20
Based on data to May, Croatia was the most popular Indian growth destination
with arrivals up by 86.6% and nights up 82.7%. Hungary and several other
Central European countries, such as Slovakia, Austria and the Czech Republic
(the last of these based only on data to March), also enjoyed significant growth
and these may be benefiting jointly as part of multi-destination trips. This
growth has been aided by a strong economic backdrop in India, evident in
robust GDP growth, a positive consumer spending outlook, and a rising number
of middle-income households. Although current volumes from India are still low
24
in absolute terms, over time the country will become increasingly more
important as a source market for European destinations.
Indian visits and overnights to select destinations Arrivals

60
50 Croatia, 86.6% (A) & 82.7% (N)

40 Montenegro, -35.5% (A)
30
20
10
Austria
Denmark
Montenegro
Turkey
Slovakia
Croatia
Poland
Hungary
Netherlands
Germany
Switzerland
Czech Rep
Finland
Romania
Sweden
Latvia
-10 Bulgaria
-20
Many destinations have reported arrivals and overnights growth from Canada
so far in 2017. Travel to Iceland remains particularly strong (170.2%) while
travel to Lithuania was also notable with arrivals up 72.8%. Spain and Cyprus
have also enjoyed some very positive arrivals growth (69.9% and 65.1%
respectively) according to early 2017 data, albeit from lower volumes. Falls
reported by Finland offset the extraordinary growth in January 2016 when it
hosted the Ice Hockey World Junior Championships and is not a cause for
concern.
Canadian visits and overnights to select destinations Arrivals

80
70 Iceland, 170.2% (A)
50 Turkey, -21.0% (A)
40
30
20
10
0
Lithuania
Montenegro
Austria
Denmark
Turkey
Spain
Portugal
Iceland
Serbia
Slovakia
Poland
Hungary
Cyprus
Croatia
Slovenia
Netherlands
Germany
Switzerland
Sweden
Czech Rep
Finland
Latvia
Bulgaria
Romania
-10
-20
25
5. ORIGIN MARKET SHARE ANALYSIS

METHODOLOGY
Based on the Tourism Decision Metrics (TDM) model, the following charts and analysis show
Europes evolving market position in absolute and percentage terms for selected source
markets. 2015 values are, in most cases, year-to-date estimates based on the latest available
data and are not final reported numbers.
Data in these charts and tables relate to reported arrivals in all destinations as a comparable
measure of outbound travel for calculation of market share.
For example, US outbound figures featured in the analysis are larger than reported departures
in national statistics as long haul trips often involve travel to multiple destinations. In 2014 US
data reporting shows 11.9m departures to Europe while the sum of European arrivals from the
US was 23.4m. Thus each US trip to Europe involved a visit to two destinations on average.
The geographies of Europe are defined as follows:
Northern Europe is Denmark, Finland, Iceland, Ireland, Norway, Sweden, and the UK;
Western Europe is Austria, Belgium, France, Germany, Luxembourg, Netherlands, and

Switzerland;
Southern/Mediterranean Europe is Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR

Macedonia, Greece, Italy, Malta, Montenegro, Portugal, Serbia, Slovenia, Spain, and Turkey;
Central/Eastern Europe is Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary,

Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Poland, Romania, Russian Federation, Slovakia,
and Ukraine.
26
5.1 UNITED STATES

US Market Share Summary
2016 Growth (2016-21) Growth (2011-16)
Annual Cumulative Cumulative
Level Share** Share 2021** Share 2011**
average growth* growth*
Total outbound travel (000s) 104,439 - 5.5% 30.9% - 35.0% -
Long haul (000s) 62,117 59.5% 6.2% 35.0% 61.3% 31.6% 61.0%
Short haul (000s) 42,322 40.5% 4.5% 24.9% 38.7% 40.4% 39.0%
Travel to Europe (000s) 27,132 26.0% 6.0% 34.0% 26.6% 31.8% 26.6%
Northern Europe (000s) 7,026 6.7% 4.7% 26.0% 6.5% 42.5% 6.4%
Western Europe (000s) 9,356 9.0% 4.6% 25.2% 8.6% 19.4% 10.1%
Southern Europe (000s) 7,279 7.0% 7.4% 43.0% 7.6% 35.3% 7.0%
Central/Eastern Europe (000s) 3,471 3.3% 9.2% 55.0% 3.9% 42.7% 3.1%
*Shows cumulative change over the relevant time period indicated
**Shares are expressed as % of total outbound travel
US Long Haul* Outbound Travel

Visits, 000s
80.000 Rest of Long Haul
Central/Eastern Europe
70.000 Southern Europe
Western Europe
60.000 Northern Europe
50.000
40.000
30.000
20.000
10.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to destinations outside North America
Europe's Share of US Market Northern Europe

% share of long haul* market Western Europe
20% Southern Europe
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2006 2008 2010 2012 2014 2016 2018 2020
27
5.2 CANADA
Canada Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Annual Cum ulative Cum ulative
average grow th* grow th*
Long haul (000s) 12,996 38.1% 3.4% 18.2% 38.0% 20.3% 32.1%
Short haul (000s) 21,098 61.9% 3.5% 18.6% 62.0% -7.9% 67.9%
Northern Europe (000s) 1,250 3.7% 3.8% 20.3% 3.7% 24.0% 3.0%
Western Europe (000s) 1,631 4.8% 3.2% 16.8% 4.7% 6.3% 4.6%
Central/Eastern Europe (000s) 272 0.8% -0.8% -4.1% 0.6% 12.2% 0.7%
*Show s cumulative change over the relevant time period indicated
Canada Long Haul* Outbound Travel

Visits, 000s
16.000 Rest of Long Haul Central/Eastern Europe
14.000 Southern Europe Western Europe
Northern Europe
12.000
10.000
8.000
6.000
4.000
2.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe's Share of Canadian Market

% share of long haul* market Northern Europe
20% Western Europe
Southern Europe
18% Central/Eastern Europe
16%
14%
12%
10%
8%
6%
4%
2%
0%
2006 2008 2010 2012 2014 2016 2018 2020
28
5.3 MEXICO
Mexico Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 2,868 12.9% 4.7% 25.6% 15.1% 44.3% 12.6%
Short haul (000s) 19,353 87.1% 0.8% 4.2% 84.9% 40.9% 87.4%
Northern Europe (000s) 111 0.5% 0.5% 2.7% 0.5% 35.1% 0.5%
Western Europe (000s) 618 2.8% 5.1% 28.4% 3.3% 0.0% 3.9%
Southern Europe (000s) 578 2.6% 3.3% 17.6% 2.9% 48.8% 2.5%
Central/Eastern Europe (000s) 168 0.8% 2.2% 11.6% 0.8% 77.9% 0.6%
Mexico Long Haul* Outbound Travel

Visits, 000s
3.500
Rest of Long Haul
3.000 Central/Eastern Europe
Southern Europe
2.500 Western Europe
Northern Europe
2.000
1.500
1.000
500
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe's Share of Mexican Market

Western Europe
35% Southern Europe
30%
25%
20%
15%
10%
5%
0%
2006 2008 2010 2012 2014 2016 2018 2020
29
5.4 ARGENTINA
Argentina Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 3,261 30.5% 1.2% 6.1% 29.6% 70.0% 27.8%
Short haul (000s) 7,420 69.5% 2.1% 10.9% 70.4% 49.1% 72.2%
Travel to Europe (000s) 1,243 11.6% -0.2% -0.8% 10.6% 89.9% 9.5%
Western Europe (000s) 61 0.6% 2.4% 12.8% 0.6% 62.6% 0.5%
Southern Europe (000s) 924 8.7% -1.4% -6.9% 7.4% 97.4% 6.8%
Argentina Long Haul* Outbound Travel

Visits, 000s
3.500
Rest of Long Haul
Southern Europe
2.500
Western Europe
1.500
1.000
500
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to destinations outside South America
Europe's Share of Argentinian Market

Western Europe
40% Southern Europe
30%
25%
20%
15%
10%
5%
0%
2006 2008 2010 2012 2014 2016 2018 2020
30
5.5 BRAZIL
Brazil Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Total outbound travel (000s) 8,195 - 3.6% 19.6% - -0.6% -
Long haul (000s) 5,806 70.8% 3.2% 17.3% 69.5% 1.9% 69.1%
Short haul (000s) 2,389 29.2% 4.6% 25.1% 30.5% -6.1% 30.9%
Travel to Europe (000s) 2,907 35.5% 0.9% 4.6% 31.0% -6.8% 37.8%
Northern Europe (000s) 197 2.4% 7.0% 40.0% 2.8% -28.5% 3.3%
Western Europe (000s) 1,196 14.6% 2.2% 11.8% 13.6% -13.2% 16.7%
Southern Europe (000s) 1,250 15.2% -2.0% -9.6% 11.5% 4.5% 14.5%
Central/Eastern Europe (000s) 264 3.2% 2.4% 12.6% 3.0% -1.6% 3.2%
Brazil Long Haul* Outbound Travel

Visits, 000s
Western Europe
6.000
Northern Europe
5.000
4.000
3.000
2.000
1.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe's Share of Brazilian Market

Western Europe
35% Southern Europe
30%
25%
20%
15%
10%
5%
0%
2006 2008 2010 2012 2014 2016 2018 2020
31
5.6 INDIA
India Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 15,800 96.1% 6.9% 39.3% 96.1% 51.8% 95.0%
Short haul (000s) 640 3.9% 6.9% 39.7% 3.9% 16.6% 5.0%
Western Europe (000s) 809 4.9% 6.0% 34.0% 4.7% 31.4% 5.6%
India Long Haul* Outbound Travel

Visits, 000s
18.000
Rest of Long Haul Central/Eastern Europe
16.000
Southern Europe Western Europe
12.000
10.000
8.000
6.000
4.000
2.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to destinations outside South Asia
Europe's Share of Indian Market

Western Europe
8% Southern Europe
6%
5%
4%
3%
2%
1%
0%
2006 2008 2010 2012 2014 2016 2018 2020
*Long haul defined as tourist arrivals to destinations outside South Asia
32
5.7 CHINA
China Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 38,351 45.1% 8.1% 47.9% 48.7% 167.2% 35.2%
Short haul (000s) 46,596 54.9% 5.1% 28.4% 51.3% 76.2% 64.8%
Western Europe (000s) 5,126 6.0% 9.9% 60.2% 7.0% 105.1% 6.1%
Central/Eastern Europe (000s) 3,857 4.5% 7.4% 42.8% 4.7% 105.7% 4.6%
China Long Haul* Outbound Travel

Visits, 000s
50.000
Rest of Long Haul
45.000
40.000
20.000
15.000
10.000
5.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to destinations outside Northeast Asia
Europe's Share of Chinese Market

Western Europe
25% Southern Europe
20%
15%
10%
5%
0%
2006 2008 2010 2012 2014 2016 2018 2020
33
5.8 JAPAN
Japan Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 14,667 65.7% 5.3% 29.2% 66.4% 17.1% 56.9%
Short haul (000s) 7,642 34.3% 4.7% 25.7% 33.6% -19.5% 43.1%
Western Europe (000s) 1,769 7.9% 7.6% 44.2% 8.9% -10.2% 8.9%
Japan Long Haul* Outbound Travel

Visits, 000s Rest of Long Haul Central/Eastern Europe
14.000
12.000
10.000
8.000
6.000
4.000
2.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe's Share of Japanese Market Northern Europe

18% Southern Europe
16%
14%
12%
10%
8%
6%
4%
2%
0%
2006 2008 2010 2012 2014 2016 2018 2020
34
5.9 AUSTRALIA
Australia Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 15,980 96.0% 4.1% 22.2% 95.9% 17.3% 96.8%
Short haul (000s) 674 4.0% 4.2% 22.9% 4.1% 47.8% 3.2%
Northern Europe (000s) 1,317 7.9% 6.5% 37.0% 8.9% -0.1% 9.4%
Western Europe (000s) 1,711 10.3% 0.9% 4.7% 8.8% 0.5% 12.1%
Australia Long Haul* Outbound Travel

Visits, 000s
18.000 Rest of Long Haul Central/Eastern Europe
12.000
10.000
8.000
6.000
4.000
2.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to destinations outside Oceania
Europe's Share of Australian Market Northern Europe

Southern Europe
12%
10%
8%
6%
4%
2%
0%
2006 2008 2010 2012 2014 2016 2018 2020
*Long haul defined as tourist arrivals to destinations outside Oceania
35
5.10 UNITED ARAB EMIRATES

United Arab Emirates Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Long haul (000s) 1,692 47.2% 1.4% 7.2% 41.1% 46.0% 40.1%
Short haul (000s) 1,890 52.8% 6.6% 37.7% 58.9% 9.1% 59.9%
Western Europe (000s) 401 11.2% 0.5% 2.7% 9.3% 41.2% 9.8%
UAE Long Haul* Outbound Travel

Visits, 000s
Southern Europe
1.000
800
600
400
200
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to destinations outside Middle East
Europe's Share of Emirati Market

Western Europe
30% Southern Europe
25%
20%
15%
10%
5%
0%
2006 2008 2010 2012 2014 2016 2018 2020
*Long haul defined as tourist arrivals to destinations outside Middle East
36
5.11 RUSSIA
Russia Market Share Summary
2016 Grow th (2016-21) Grow th (2011-16)
Total outbound travel (000s) 18,893 - 8.5% 50.6% - -38.6% -
Long haul (000s) 5,008 26.5% 6.9% 39.8% 24.6% -17.9% 19.8%
Short haul (000s) 13,885 73.5% 9.1% 54.5% 75.4% -43.8% 80.2%
Travel to Europe (000s) 13,885 73.5% 9.1% 54.5% 75.4% -43.8% 80.2%
Northern Europe (000s) 1,084 5.7% 7.8% 45.5% 5.5% -33.4% 5.3%
Western Europe (000s) 1,314 7.0% 6.6% 37.4% 6.4% -20.9% 5.4%
Southern Europe (000s) 4,362 23.1% 9.7% 58.7% 24.3% -34.5% 21.6%
Central/Eastern Europe (000s) 7,124 37.7% 9.3% 56.3% 39.2% -51.7% 47.9%
Russia Long Haul* Outbound Travel

Visits, 000s
45.000 Rest of World
Southern Europe
35.000
Western Europe
25.000
20.000
15.000
10.000
5.000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
*Long haul defined as tourist arrivals to all destinations
Europe's Share of Russian Market

Western Europe
70% Southern Europe
60%
50%
40%
30%
20%
10%
0%
2006 2008 2010 2012 2014 2016 2018 2020
*Long haul defined as tourist arrivals to all destinations
37
6. ECONOMIC OUTLOOK
Assessing recent tourism data and industry performance is a useful way of directly monitoring
the key trends for travel demand across Europe. This can be complemented by looking at key
trends and relationships in macroeconomic performance in Europes key source markets
which can provide further useful insight into likely tourism developments throughout the year.
The linkages between macro and tourism performance can be very informative. For example,
strong GDP or consumer spending growth is an indication of rising prosperity with people more
likely to travel abroad. It is also an indication of rising business activity and therefore stronger
business travel. Movements in exchange rates against the euro can be equally important as it
can influence choice of destination. For example, if the euro appreciated (gained value)
against the US dollar, the Eurozone would become a more expensive destination and
therefore potentially less attractive for US visitors. Conversely, depreciation of the euro against
the US dollar would make the Eurozone a relatively cheaper destination and therefore more
attractive to US travellers.
6.1 OVERVIEW
INCREASINGLY ROBUST GROWTH
Oxford Economics (OE) world GDP growth forecast of 2.7% for 2017
(compared to 2.3% growth in 2016) continues to reflect the strengthening in
global trade currently taking place in several regions. This has led to an
upgrade of trade forecasts to 5.4%. Global indicators continue to point to strong
economic activity, with the composite PMI index close to its highest level in two
years in May.
Previously strong soft data in the US has cooled as expectations of a major tax
reform and infrastructure program have ebbed. OE sees growth accelerating in
2018 owing to a modest fiscal boost, but risks are tilted to the downside as
Congress agenda is extremely busy. OE envisages the Fed proceeding with
further gradual rate hikes and balance sheet normalization this year, but a more
gradual approach may be warranted if inflation continues to soften.
38
In the UK, the general election on 8 June unexpectedly resulted in a hung

parliament, raising uncertainty.
GDP revisions in several countries meant the Eurozone expanded a robust

0.6% in Q1, while leading indicators suggest continued strength in Q2. A
stronger outlook for exports and investment coupled with improved sentiment
has led OE to upgrade its Eurozone GDP forecast again to an above-
consensus 2% for this year. Elsewhere in Europe, OE has also upgraded its
forecasts for the CEE economies significantly as economic activity continues to
benefit from stronger growth in the continent.
Emerging markets continue to benefit from a global upturn in trade and

industry, at the heart of which is a China-commodity nexus. OE finds that this
link will continue to support world growth in the near term, but the global upturn
is vulnerable to moderating Chinese growth and to a slippage in commodity
prices.
Summary of economic outlook, % change year ago*

2017 2018
Consumer Unemploy- Exchange Consumer Unemploy- Exchange
Country GDP Inflation GDP Inflation
expenditure ment * rate*** expenditure ment ** rate***
UK 1.7% 1.6% 0.1% -4.1% 2.8% 1.4% 0.5% 0.1% 2.6% 2.0%
France 1.5% 1.1% -0.7% 0.0% 1.0% 1.5% 1.5% -0.4% 0.0% 1.0%
Germany 2.0% 1.3% -0.3% 0.0% 1.9% 1.6% 1.3% -0.1% 0.0% 2.1%
Netherlands 2.4% 1.3% -1.2% 0.0% 1.6% 1.9% 1.4% -0.1% 0.0% 1.5%
Italy 1.3% 1.1% -0.3% 0.0% 1.4% 1.0% 0.8% -0.4% 0.0% 1.3%
Russia 1.4% 1.0% 0.1% 16.7% 4.3% 1.4% 1.8% -0.1% -3.3% 4.1%
US 2.2% 2.5% -0.4% 0.5% 2.1% 2.7% 2.7% -0.1% -2.1% 1.9%
Canada 2.5% 2.9% -0.5% -0.2% 1.9% 2.0% 1.7% 0.1% -1.0% 1.9%
Brazil 0.4% -0.5% 1.7% 7.9% 3.9% 1.9% 1.4% -0.4% -7.7% 4.3%
China 6.6% 7.2% -0.1% -3.2% 1.5% 6.1% 6.9% 0.0% -3.3% 2.0%
Japan 1.4% 0.8% -0.3% -2.8% 0.5% 1.3% 0.7% -0.2% -5.4% 0.8%
India 6.9% 7.1% 0.1% 4.1% 3.9% 7.4% 8.4% 0.1% -0.3% 5.3%
* Unless otherw ise specified
** Percentage point change
*** Exchange rates measured against the euro. A positive change indicates stronger local currency against the euro and therefore a positive impact on
outbound tourism demand. A negative change indicates w eaker local currency against the euro and therefore a negative impact on outbound tourism
demand.
39
6.2 EUROZONE
The continued strong tone to recent economic data, along with an upward
revision to Q1 GDP, has prompted OE to upgrade its GDP growth forecast for
2017 from 1.9% to 2.0%, well above the consensus forecast of 1.7%.
The first detailed Q1 GDP release for the Eurozone revealed that quarterly
GDP growth was revised up from 0.5% to 0.6%. The breakdown showed
broad-based strength. Encouragingly, investment recorded another solid
expansion, suggesting that it can pick-up some of the slack from slowing
household spending.
The business surveys are on track to exceed their Q1 averages this quarter,
suggesting that a further acceleration in GDP growth is quite possible. As yet,
there is little hard data for Q2, but the healthy unemployment figures for April
unemployment recorded its sharpest monthly fall in over two years is
indicative of another quarter of robust growth. OE has pencilled in a 0.6% rise
in GDP, but there are upside risks (and some downside risks) to this figure.
Over the rest of the year, OE expects the recovery to remain more broadly-
based than in 2016 as investment and exports take over the baton from
household spending. While the latter will inevitably slow in response to higher
inflation, rising employment and tentative signs of accelerating wage growth
imply that spending will remain solid.
Eurozone: Exports & foreign demand

% year
20 Forecast
15
10
-5
-10
Exports
-15 World trade
-20
-25
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source : Oxford Economics/Haver Analytics
Despite the upward revisions to OEs GDP forecast over recent months, there
is little evidence to suggest that underlying inflation pressures are building more
rapidly than previously assumed a view to which a majority of the ECB
Governing Council appear to subscribe. Accordingly, OE does not expect the
ECB to bring forward policy normalisation in response unconventional policy
will be unwound very slowly.
40
6.3 UNITED KINGDOM
The downward revision to the ONS estimate for Q1 GDP has led OE to lower
its growth forecast in 2017 from 1.8% to 1.7%. Though Q2 looks set to be
firmer, the bigger picture remains one of weaker growth this year as higher
inflation weighs on household spending power, with other parts of the economy
unable to compensate fully.
The second estimate for Q1 2017 reported quarterly GDP growth of just 0.2%,
down from the preliminary estimate of 0.3% and the softest outturn for a year.
The first cut of the expenditure data showed the weakest outturn for consumer
spending growth since Q4 2014, while net trade exerted a sizeable drag,
although this was partly due to the ongoing volatility in sales of non-monetary
gold.
UK: Exports & world trade

% year World trade Exports (non-fuel goods)
16
Forecast
12
-4
-8
-12
-16
2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Oxford Economics
It is likely that Q2 will be slightly better. The March services output data
suggested that the sector carried reasonable momentum into Q2, while Aprils
retail sales figures and CIPS surveys were stronger than in earlier months.
The general election on 8 June resulted in a hung parliament, with the

Conservatives the largest party but lacking a majority. While political
uncertainty may weigh on activity, the possibility of a more growth-friendly fiscal
policy and a softer Brexit could represent upsides.
The May Inflation Report confirmed that the MPC is in wait-and-see mode,
with the outcome of Brexit negotiations the major concern. But it was keen to
stress that if Brexit proceeds smoothly, markets are too bearish in their
expectations for interest rates. The MPCs messages are consistent with OEs
long-held view that the first rise in Bank Rate will come in H2 2019, with rates
then rising at 50bp a year thereafter.
41
6.4 UNITED STATES
After a typical slow start to the year, the US economy is expected to have
rebounded strongly in Q2. Nonetheless, with some of the previously robust
soft data now tempering, OE sees hard data as the better gauge of GDP
growth. The US economy should settle for 2.2% growth in 2017 as a whole and
accelerate to 2.7% in 2018, supported by a modest fiscal stimulus package. OE
sees the Fed proceeding cautiously with two additional rate hikes this year and
the onset of balance sheet normalisation, though it notes the risk of a more
conservative approach if inflation cools significantly.
Nonfarm payrolls only rose 138,000 in May, pushing the 3-month moving
average to its lowest level in five years. However, the employment data can be
quite volatile in May and the 12-month moving average remains solid at just
under 200,000. The unemployment rate fell to a new cyclical low of 4.3% but
this was mainly driven by a fall in the participation rate to 62.7%. Despite an
increasing number of regional and sectoral pockets of labor shortage and
stronger wage growth, broader measures of wage growth have so far failed to
pick-up materially from the 2.0-2.5% range.
OE forecasts steady real disposable income growth supporting consumer

outlays, but the momentum will moderate relative to last year. However, after
spiking in Q1, consumer price inflation looks set to slow on a mixture of factors,
thereby supporting consumers' spending power.
OE continues to assume that a fiscal stimulus package (worth around $1.2

trillion) will be implemented starting in Q1 2018, but Congress' busy agenda
has diminished the odds of such a large package. Treasury yields, financial
stocks and the dollar have unwound most of the changes made since the onset
of the Trump reflationary trade.
42
6.5 JAPAN
Despite a downward revision to Q1 GDP, OE still forecasts growth of 1.4% this

year and 1.3% in 2018. Momentum in global demand and a weaker yen are
expected to drive robust growth in exports in 2017. Moreover, it expects a
boost to government infrastructure spending and rising cash handouts to result
in domestic demand becoming an increasing driver of growth. However, the
economy faces several headwinds. Apart from risks to trade, the yen is
vulnerable to risk-off episodes, while sluggish wage growth could also stall the
expected recovery in household spending.
Q1 GDP growth was revised down to 0.3% q/q from the advance estimate of
0.5%. While the rebound in household spending was more muted than
previously estimated, business investment was revised higher and the solid
outturn for exports remained intact.
Recent indicators for investment and exports suggest this solid momentum has
spilled into Q2. Export volumes rose 6.1% on the year in April and the
manufacturing PMI rose in May, with both domestic and export orders rising.
OE expects exports to remain the key driver of economic growth this year,
although the contribution from the external sector is likely to ease in H2 as
Chinese import demand moderates. Meanwhile, fiscal and monetary policy will
be supportive. However, overall GDP growth is likely to be bumpy.
OE now forecasts the yen to be slightly stronger against the US dollar this year,
although it still expects the growing divergence in US/Japanese monetary
policy to weaken the yen. It expects the yen to be at 113.7 by end-2017, and to
fall further to 118.5 by end-2018.
Japan: Exchange rate per US$

Level
70
F'cast
80
90
100
110
120
130
140
150
1995 1998 2001 2004 2007 2010 2013 2016 2019
Source: Oxford Economics / Haver Analytics
43
6.6 EMERGING MARKETS
FURTHER PICK-UP IN EXPORT GROWTH IN CHINA
Goods exports growth in China picked-up modestly in May, to 8.7% y/y in US

dollar terms from 8% in April, with the acceleration more marked in real terms
based on OE estimates. While OE remains cautious on the durability of the
improvement in global demand growth, the composition of Chinas export
growth shows that momentum in demand from the US and the EU continues to
improve. This is encouraging for the sustainability of the recovery in global
trade.
CNY exchange rate

CNY/US$ Spo t rate Index
6.8 US$ NE ER (RHS) 104
CFE TS ba sket (RHS)
102
100
6.9 98
96
94
7.0 92
Jan 2017 Mar 2017 May 2017
Source: Oxf ord Economics, CEIC Data
Meanwhile, the yuan has appreciated around 1% against the US dollar since
th st
25 May, with a particularly large move in the spot rate on 31 May and in the
st
fixing rate on 1 June. OE does not think that the authorities are trying to show
the yuans resilience in the wake of the recent downgrade of Chinas sovereign
debt by Moodys. Instead, OE believes the recent exchange rate appreciation
can be seen as a belated response to earlier US dollar weakening. Indeed,
during May as a whole, the yuan was broadly unchanged against a basket of
Chinas main trading partners. This interpretation of a delayed response to the
US dollar weakening is consistent with the recent announcement by the PBoC
that it wanted to adjust the way that the yuan fixing rate is determined,
introducing a counter-cyclical factor.
NO RATE CUT YET IN INDIA
Expectations of a rate cut in India have risen following the shift in the RBIs
policy tone at its June meeting. Not only was the policy statement less hawkish
than in April, but it also included substantial downward revisions to the central
banks inflation projections. OE agrees that the possibility of a rate hike has
fallen this year, with odds of further easing over the next six months rising. In
line with this and downwardly-revised inflation forecasts (4.8% in Q4 2017 as
opposed to 5.5% earlier), OE has pushed out its rate hike call to mid-2018.
However, a rate cut is not in the current baseline outlook. OEs read of the
policy statement is not as dovish as some other analysts and further easing is
contingent on activity indicators disappointing in the short term as well, rather
than just subdued inflation. The economy is already bouncing back from the
44
lows of Q1 and should gather pace going forward as remonetisation progresses

and pent-up consumption demand comes to the fore, pushing GDP growth up
to 7.4% in FY18 from 7.1% in the last fiscal year.
India: Policy rate and inflation

% year %
18 9.0
16 Food CPI
8.5
14
12 8.0
Repo rate
10 (RHS)
CPI 7.5
8
6 7.0
RBI's inflation
4 target
6.5
2
0 6.0
2012 2013 2014 2015 2016 2017
Source: Oxford Economics/Haver Analytics
POLITICAL UNCERTAINTY IN BRAZIL WILL SLOWLY EASE
The scandal surrounding President Temer has prompted OE to revise its

interest rate forecast. Increased uncertainty will force the central bank to pause
rate cuts at 8.5% this year (OE previously forecast 8%). The most likely
scenario is that a weakened Temer will muddle through until the end of his
term in December 2018. OE assumes he manages to avoid a corruption trial
and that Congress does not open impeachment proceedings against him. It
expects delayed and very diluted pension reforms to eventually emerge,
causing persistent weakness for the real and an erosion of confidence. With
growth faltering, we see the BCB cutting rates before October 2018 to jump-
start a recovery. An alternative scenario sees Temer standing down, causing
short-term stress and renewed selling pressure on the BRL, putting upward
pressure on inflation expectations.
45
STIMULUS MEASURES IN TURKEY TO BOOST GROWTH
In Turkey, OE had argued previously that, with the referendum out of the way
and with a longer policy horizon, the authorities would move quickly to
implement economic reforms. So far there have not been concrete steps in this
direction. Instead, the government has settled on a policy of stimulating the
economy in the short term, primarily through looser fiscal policy (tax cuts and
credit guarantee schemes). OE expects these measures to boost growth in the
near term, and, accordingly, has raised its 2017 GDP growth forecast to 3%
from 2.6%. Meanwhile, monetary policy will be kept relatively tight in order to
ensure lira stability and prevent double-digit inflation from becoming
entrenched.
Turkey: Contributions to annual GDP

% change, y/y
Imports Stocks
16 Forecast
Exports Investment
14
Gov't spending Consumption
12
GDP
10
8
6
4
2
0
-2
-4
-6
2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Oxford Economics/Haver Analytics
46
7. APPENDIX 1
GLOSSARY OF COMMONLY USED TERMS AND ABBREVIATIONS
Airline industry indicators
ASK Available Seat Kilometers. Indicator of airline supply, available seats x kilometers flown;
PLF Passenger Load Factor. Indicator of airline capacity. Equal to revenue passenger
kilometers (RPK) / available seat kilometers (ASK);
RPK Revenue Passenger Kilometers. Indicator of airline demand, paying passenger x

kilometers flown;
3mth mav Three month moving average.
Hotel industry indicators
ADR Average Daily Rate. Indicator of hotel room pricing, equal to hotel room revenue /
rooms sold in a given period;
Occ Occupancy Rate. Indicator of hotel performance, equal to the number of hotel rooms
sold / room supply;
RevPAR Revenue per Available Room. Indicator of hotel performance, equal to hotel room
revenue / rooms available in a given period.
Central Banks
BoE Bank of England;
MPC Monetary Policy Committee of BoE;
BoJ Bank of Japan;
ECB European Central Bank;
Fed Federal Reserve (US);
RBI Reserve Bank of India;
OBR Office for Budget Responsibility;
PBoC Peoples Bank of China.
Economic indicators and terms
BP Basis Point. A unit equal to one hundredth of a percentage point;
Broad money Key indicator of money supply and liquidity including currency holdings as
well as bank deposits that can easily be converted to cash;
47
CPI Consumer Price Index. Measure of price inflation for consumer goods;
FDI Foreign Direct Investment. Investment form one country into another, usually by
companies rather than governments;
GDP Gross Domestic Product. The value of goods and services produced in a given
economy;
LCU Local Currency Unit. The national unit of currency of a given country, e.g., pound, euro,
etc.;
PMI Purchasing Managers Index. Indicator of producers sentiment and the direction of the
economy;
PPI Purchase Price Index. Measure of inflation of input prices to producers of goods and
services;
PPP Purchasing Power Parity. An implicit exchange rate which equalises the price of
identical goods and services in different countries so they can be expressed with a common
price;
QE Quantitative Easing. Expansionary monetary policy pursued by central banks involving

asset purchases to reduce bond yields and increase liquidity in capital markets;
G7 Group of seven industrialised countries comprising the United States, the United
Kingdom, France, Germany, Italy, Canada, and Japan.
48
8. APPENDIX 2
ETC MEMBER ORGANISATIONS
Austria Austrian National Tourist Office (ANTO)

Belgium: Flanders Tourism Flanders
Wallonia Wallonie-Belgique Tourisme (WBT)
Bulgaria Bulgarian Ministry of Tourism
Croatia Croatian National Tourist Board (CNTB)
Cyprus Cyprus Tourism Organisation (CTO)
Czech Republic CzechTourism
Denmark VisitDenmark
Estonia Estonian Tourist Board - Enterprise Estonia
Finland Visit Finland Finpro Ry
Germany German National Tourist Board (GNTB)
Greece Greek National Tourism Organisation (GNTO)
Hungary Hungarian Tourism Ltd.
Iceland Icelandic Tourist Board
Ireland Filte Ireland and Tourism Ireland Ltd.
Italy Italian Government Tourist Board
Latvia Latvian Tourism Development Agency (TAVA)
Lithuania Lithuanian State Department of Tourism
Luxembourg Luxembourg for Tourism (LFT)
Malta Malta Tourism Authority (MTA)
Monaco Monaco Government Tourist and Convention Office
Montenegro National Tourism Organisation of Montenegro
Norway Innovation Norway
Poland Polish Tourist Organisation (PTO)
Portugal Turismo de Portugal, I.P.
Romania Romanian Ministry of Tourism
San Marino State Office for Tourism
Serbia National Tourism Organisation of Serbia (NTOS)
Slovakia Ministry of Transport and Construction of the Slovak Republic
Slovenia Slovenian Tourist Board
Spain Turespaa - Instituto de Turismo de Espaa
Switzerland Switzerland Tourism
Turkey Ministry of Culture and Tourism
49

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European Tourism in 2017: Trends & Prospects (Q2/2017)

EUROPEAN TOURISM IN 2017:

Quarterly Report (Q2/2017)

A quarterly insights report produced for the Market Intelligence Group

Brussels, June 2017

Copyright 2017 European Travel Commission

European Tourism in 2017: Trends & Prospects (Q2/2017)

Published and printed by the European Travel Commission

ISSN No: 2034-9297

This report was compiled and edited by:

Cover: Mediterranean seascape, Monaco Bay

3.2 Accommodation ...................................................................................... 15

4. Special Feature .............................................................................................. 16

5.2 Non-European Markets ........................................................................... 23

6. Origin Market Share Analysis......................................................................... 26

6.2 Canada .................................................................................................... 28

6.3 Mexico ..................................................................................................... 29

6.4 Argentina ................................................................................................. 30

6.5 Brazil ....................................................................................................... 31

6.6 India ........................................................................................................ 32

6.7 China ....................................................................................................... 33

6.8 Japan ...................................................................................................... 34

6.9 Australia .................................................................................................. 35

6.10 United Arab Emirates ............................................................................ 36

6.11 Russia ................................................................................................... 37

7. Economic Outlook .......................................................................................... 38

7.2 Eurozone ................................................................................................. 40

7.3 United Kingdom....................................................................................... 41

7.4 United States........................................................................................... 42

7.5 Japan ...................................................................................................... 43

7.6 Emerging Markets ................................................................................... 44

An overwhelming majority of destinations reported growth in visitor arrivals with

Foreign visits to select destinations

Source: TourMIS *date varies (Jan-May) by destination

European Passenger Load Factor 2015

The accommodation sector also performed well across the majority of

European source market summary

DEMAND FOR EUROPEAN DESTINATIONS REMAINS STRONG FUELLED

The economic picture in the Eurozone looks brighter, helped by a domestic

Optimism surrounds the Russian outbound travel market as the economy is

CAPITALISING ON THE REGIONS VAST OFFERING IS KEY TO ENSURE

Jennifer Iduh (ETC Executive Unit)

TOURISM PERFORMANCE SUMMARY

28 Foreign visits and overnights to select destinations Arrivals

Source: TourMIS *date varies (Jan-May) by destination

Switzerland reported a growing number of arrivals based on data to April, up

reportedly offset by substantial decline in the number of overnights - down

Tourism Performance, 2016 Year-to-Date

1. GLOBAL TOURISM FORECAST

2. RECENT INDUSTRY PERFORMANCE

2.1 AIR TRANSPORT

Annual International Air Passenger Growth 2015

Year-to-date RPK growth was strongest in Asia/Pacific based on data to April

Continued expansion in Asia/Pacific passenger demand will be facilitated by

Monthly International Air Passenger Growth Jan-17

International Air Passenger Traffic Growth Total

Aviation capacity within Europe continued to rise in early 2017 as a

European Aviation Capacity

Based on data to April European Passenger Load Factor 2015

Globally, accommodation performance has been positive so far in 2017 based