Tourism trends in a changing world

David EdwardsOctober 2010

Top inbound markets to Britain

Market

USA

Ireland

German

France

Netherlands

Market

France

Ireland

USA

Germany

Spain

1969 2009

Why international visitors come to Britain

• Our Built Heritage• Our Cultural Heritage and Contemporary

Culture• Because we are a trading and business hub• To visit friends or relatives• To study at our universities or language schools

‘Word of Mouth’

• Reliance on recommendations from people we know is not new

• Reliance on ‘User Generated Content’ is…• And there are now 2 billion people with Internet

access• Accommodation establishments, restaurants

and attractions all have a ‘right to reply’ – this should be used, but used wisely

Life priorities and holiday wants vary across the globe

• Career and self-development are centre stage in emerging economies

• In more developed economies citizens seek a balanced lifestyle with plenty of ‘me’ time

• For many people holidays are now seen as a part of everyday life

• The staycation trend shows that while people will make compromises they still want a holiday

• For some it’s about ‘seeing the sights’ for others it’s about an ‘immersive experience’

Global Tourism League Tables

2009 Rank Destination Arrivals (m)

1 France 74.22 USA 54.93 Spain 52.24 China 50.95 Italy 43.26 UK 28.0

7 Turkey 25.58 Germany 24.29 Malaysia 23.610 Mexico 21.5

2009 Rank Destination

Receipts US$bn

1 USA 94.22 Spain 53.23 France 48.74 Italy 40.25 China 39.76 Germany 34.77 UK 30.1

8 Australia 25.69 Turkey 21.310 Austria tbc

2009 Rank Source Market US$bn

1 Germany 80.82 USA 73.13 UK 48.5

4 China 43.75 France 38.96 Italy 27.87 Japan 25.18 Canada 24.39 Russian Federation 20.8

10 Netherlands 20.7

Source: UNWTO

Most Visited 2000 and 2009

0

10

20

30

40

50

60

70

80

90Fr

ance

USA

Spai

n

Chi

na

Italy

UK

Turk

ey

Ger

man

y

Mal

aysi

a

Mex

ico

No.

Arri

vals

(milli

on)

2000 2009

Turkey and Malaysia on track to leapfrog

UK

Source: UNWTO

Top Earners 2000 and 2009

0

10

20

30

40

50

60

70

80

90

100

USA

Spai

n

Fran

ce Italy

Chi

na

Ger

man

y

UK

Aust

ralia

Turk

ey

Aust

ria

US

$ (b

illion

)

2000 2009

UK slips from 5th to 7th

Source: UNWTO

Top Spenders 2000 and 2009

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Germany USA UK China France Italy Japan Canada Russia Netherlands

US

$ (b

illion

)

2000 2009

China soon in top 3 while Japan may slip

out of top ten

Source: UNWTO

Inbound to the UK: Long-Term Trends

0

5

10

15

20

25

30

35

1980 1990 2000 2010

visi

ts (

m)

or

spe

nd

(£

bn

20

10

pri

ces)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

UK

's s

ha

re o

f g

lob

al t

ou

rism

re

ceip

ts

Visits (m) Spend (£bn, 2009 prices) UK's global share of tourism receipts

+137%

+93%

Competition for International Tourism is Fierce

Destinations with positive growth in

2009

Turkey, South Africa, Cuba, Peru, Cambodia, Bahrain, Montenegro, Morocco

Global Tourism is Primarily Intra-Regional not Inter-Regional

• 82% of arrivals in Western Europe originate in Western Europe

• 70% of outbound trips from Western Europe are to other Western European destinations

• 88% of outbound trips from Asia are to other destinations in Asia

Europe’s Dominance Diminishing

Origin-Destination Pairs Forecast to see Fastest Growth 2010-20

From ToNortheast Asia Northeast AsiaWestern Europe Western EuropeSoutheast Asia Southeast AsiaEmerging Europe Emerging EuropeNorth America North AmericaNortheast Asia Southeast AsiaSouth America South AmericaWestern Europe Emerging EuropeEmerging Europe Western EuropeNorth America Western Europe

Six out of ten are intra-regional

Underlying Growth in Inbound Tourism to the UK

5,000

10,000

15,000

20,000

25,000

30,000

35,00019

79

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Visit

s (0

00s)

/Spe

nd (£

m, 2

009

price

s) Inbound Visits 000s

Inbound Spend £m, 2009 prices

Recent inbound volume and value trends

Source: IPS

We forecast that in 2010 visits will decline 0.7% while spend

increases by 1.3%

Inbound Tourism will be Worth More than Overnight Domestic Trips in 2020

0%

10%

20%

30%

40%

50%

60%

Spending by inbound visitors and fares toUK carriers

Spending by UK residents on trips 1+nights

Spending by UK residents on day trips

shar

e of

spe

ndin

g

2010 2020Source: Deloitte, Oxford Economics

Tourism has the potential to support 250,000 more UK jobs

over the next decade

Expect the Unexpected: Volcanic Ash

Recent Inbound Journey Purpose Trends

Economic Trends

• Economic cycles are the norm…• …however, the period from 2008 has been

anything but normal• More of the same to come; taxes up, spending

down, job cuts, banks still not lending• With inflation waiting in the wings• Economic life looks different in Asia

Tackling the ‘Britain is an Expensive Destination’ Perception

Source: Bank of England

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Annu

al c

hang

e in

cos

t of S

terli

ng

Euro against Sterling

Accommodation Sector Trends

• In 1993 there were 10,555 branded budget hotel rooms in the UK

• At the end of 2009 there were 109,528• Premier Inn (38%) and Travelodge (25%)

dominate the market

Transport and Connectivity Trends

• Britain has unrivalled global connectivity… but• No new runways in South East England• Plenty in Dubai• APD may become a ‘per plane’ tax• High Speed Rail on the cards• Visa requirements

Markets Where Visa Regime has Changed

-30%

-20%

-10%

0%

10%

20%

30%

40%

Taiwan South Africa

chan

ge in

visi

ts in

12

mon

ths

to A

pril 2

010

Typical long-haul visitor contributes

£165 in taxes, excluding visa fees

No longer need a

visa

Now need a visa

Synopsis of Market Conditions

Find out more at visitbritain.org