Tourism One Minute Report
A global market scan in one minute or less.
July 9, 2011

ARE WE THERE YET?

NORTH AMERICAN MARKET WATCH

US Travel: ↑ The US Travel Price Index (cost of travel away from home) increased 7.7%, May 2011 over 2010. Motor fuel prices showed the most dramatic % change (+36.8%) but the cost of air travel was also a factor (+9.1%)1. Despite that, there is cause for optimism: the USTA’s Travel Tracker shows that US international enplanements have increased by 3.9% (Jan-Apr), outpacing growth in domestic enplanements (at 2.4%)2 ; PhoCusWright reports that the US leisure travel market is ‘clearly on an upswing’ – citing an improvement in travellers planning to take more trips (rather than fewer trips) in 20113.

US Economy: Labor is a prime issue in the story of the US economic recovery – the unemployment rate edged up again to 9.2% in June. Earnings are not keeping up with inflation – the Consumer Price Index increased by 3.6%. The US Consumer Confidence Index retreated to a six-month low in May (60.8) and consumers have less discretionary income in May 2011 than in May 2010, and is still far below what they had in 20084. Travel employment is outpacing other industries – more than 1 in 5 of jobs created were in this industry (an indicator that Americans are travelling in their own country)5.

Canadian Travel: ↑ Canadians continue to travel internationally in increasing numbers (up by 4% between March and April), mostly to the US. The number of trips in April by Canadians to the US was the highest it has been since 1995. Despite higher fuel costs, car trips continue to be popular. Same-day car travel has been on an upward trend since September of 2010. Travel by Canadians to overseas countries was up 3.1% in April over March6.

Tourism spending in Canada edged up 0.1% in the first quarter of 2011 – a cumulative gain of 6.5% with the second quarter of 20097. The reason: air transport. Average domestic and international air fare in the third quarter of 2010 was up by 7.5% over the same period in 2009. All other tourism commodities decreased by 1%.

Canada’s Economy: The Loonie continues to hover just above par with the US dollar. Consumers are spending less in Canada, dampened by some temporary influencers, such as a hike in Quebec’s provincial sales tax and the end of HST rebate cheques in Ontario. Employment rose 0.1% in May, reinforcing its 0.3% gain in April. But, the labour force has grown only 0.8% in the past year, reflecting a lower participation rate by young people8.

EUROPEAN MARKET WATCH

Europe overall: → The volume of retail trade in the EU was down slightly, to 1.1%9.

Germany: Despite a fall in the unemployment rate to 6.1% in April, consumers remained frugal and retail sales volumes fell for the second straight month10.

United Kingdom: ↓ in the 12 month period to April 2011, the number of visits abroad fell by 2% (Europe -3%, North America -1%)11. Domestic demand remained weak in Q1 of 2011, while the annual rate of inflation hit a two-and-a-half year high in April of 4.5%, boosted by rising travel costs and higher duties on alcohol and tobacco12.

France: ↑ The unemployment rate eased to 9.4% in April, while inflation was steady at 2.2%13.

ASIA PACIFIC MARKET WATCH

The Pacific Asia Travel Association (PATA) reports a 6.8% increase (year over year) in visitor arrivals to Asia Pacific destinations for April and 5.4% year to date (Jan-Apr). Double digit growth was recorded in Sri Lanka (+67%), Nepal (+34%), Maldives (+32%), India (+18%), Vietnam (+22%), Myanmar (+21%), Singapore (+17%), Cambodia (+11%), Hong Kong (+20%) and Macau (+11%)14.

India: ↑ Indian outbound growth is pegged at 25%, lower than domestic travel growth (35%). However, the increase in low-cost carriers offering international flights could cause a surge in international travel interest in the future15.

Japan: → Booking levels for packaged tours in recent weeks have increased by 10-20% (year over year). However, demand for long-haul destinations (North America, Europe and Australia) have been more sluggish than shorter-haul destinations like Thailand16. Overall the number of Japanese travellers heading overseas this summer is expected to dip by 5.8%. Those who do travel overseas will stay longer; with average spend up by 5.4%17.

China: ↑ The Chinese Consumer Confidence Report was up 8 points in the first quarter of 2011, driven by increasing optimism among consumers about job prospects. Concerns over food prices and inflation appear to have abated. Confidence is strongest in Central China18. China now has Approved Destination Status (ADS) agreements with 140 destinations in 110 countries.

Australia: ↑A strong Aussie dollar and improving economic conditions have contributed to the largest increase in departures since March of 2010 (up 11.4% in May). Top outbound markets are China (46%), Malaysia (42 %) and Indonesia (41%). However, the US and the UK also saw healthy increases in Australian visitation. Holidays, education and visiting friends or relatives are the fastest growing reasons for travel19.

New Zealand: ↑In the year ended at May 2011, trips abroad by New Zealand residents increased by 6.5% over the previous year. The top travel destinations were Australia, Fiji, UK and the USA with the USA seeing the greatest growth (9.2%)20.

CLEAR EVIDENCE OF THE POWER OF DESTINATION MARKETING

Two US destinations demonstrated the incredible power of a good destination marketing campaign – in the midst of a major recession that significantly affected tourism worldwide:

  • Michigan’s “Pure Michigan” campaign generated an incremental 4.36 million trips from national markets outside of its region in 2009. The $7.8 million in advertising investment generated $43.5 million in taxes for the state – a return of more than 5:1 in its investment. In 2010, visitor spending in the state jumped from $15.1 billion to $17.2 billion – the biggest single-year increase in travel spending in Michigan history21.
  • Philadelphia’s 2009/10 “With Love XOXO” campaign turned an expenditure of $4 million into 3.7 million incremental trips, $432 million in additional direct spending and $46.1 million in incremental state and local taxes – a return on investment of 11:122.

WORD OF MOUTH

“…We’re going to need a bigger bus”

From an AOL Travel news article on July 9, describing the town of Cape Cod’s reaction to a sighting of three Great White Sharks off the coast, attracted by a bumper crop of seals. Contrary to the premise of the movie “Jaws”, in which the mayor didn’t want to let people know that a man-eater was in the water for fear of stifling tourism, the town is reaping a tourism bonanza selling shark-themed everything, from bottle openers to swim toys, to tourists who are flocking to the area, hoping to see something ominous. “…Roy Schneider could have apparently saved a lot of money if he’d just known something about marketing.”23

CORRECTION

The June edition of this report referred readers to a great site dedicated to ‘taking back Vancouver’ after the post-Stanley Cup riots. The correct address is www.thisisourvancouver.com. Apologies!

  1. US Travel Association, Travel Price Index, May 201, p.1 []
  2. “US Travel Tracker”, US Travel Association, Data available as of July 5, 2011 []
  3. PhoCusWright, “Waiting to Exhale: PhoCusWright Releases Key U.S. Traveler Insights:, July 7, 2011 []
  4. Suzanne Cook, “U.S. Travel Outlook”, UTA, June 2011 []
  5. US Travel Association, “New Stagnant Labor Market Shows Uncertainty for Economic Recovery; Travel Jobs Continue to Outpace Other Industries in June”, Press Release July 8, 2011 []
  6. Statistics Canada, “Travel Between Canada and other Countries’, The Daily, June 17, 2011 []
  7. Statistics Canada, “Air Fare”, the Daily, July 5, 2011 []
  8. Statistics Canada, Canadian Economic Observer, Section 1: Current economic conditions, Overview, June 2011 []
  9. Eurostat , “Volume of retail trade down by 1.1% in both euro area and EU 27”, released July 5, 2011 []
  10. Eurostat , “Volume of retail trade down by 1.1% in both euro area and EU 27”, released July 5, 2011 []
  11. UK Office of National Statistics, “Travel and Tourism: International visits up in early 2011, July 9, 2011 []
  12. Stats Canada, Canadian Economic Observer, June 2011 []
  13. Ibid []
  14. PATA, “Asia-Pacific arrivals up 6.8 percent with South Asia leading the way”, Press Release, June 27, 2011 []
  15. Dilasha seth, “Tour operators plan new concepts for autumn, winter breaks”, Business Standard, June 27, 2011 []
  16. Martin Moodie “Japanese outbound demand begins to pick up for the summer”, June 29, 2011 []
  17. Martin Moodie, “Thailand, short haul locations to dominate Japanese travel”, July 8, 2011 []
  18. Nielson, “Chinese Consumer Confidence Rebounds Strongly in Q1 2011 – Willingness to Spend Heats Up Across All Regions, April 2011 []
  19. Government of Australia, “Impact”,  April 2011 []
  20. New Zealand Ministry of Economic Development, Key Tourism Statistics, June 27, 2011 []
  21. US Travel Association & Longwoods International, The Power of Destination Marketing, July 2011, pp.9-11 []
  22. Ibid, p. 23 []
  23. AOL Travel, “Sharks bring tourists to Cape Cod: We’re going to need a bigger bus”, July 9, 2011 []

Mahon Jones & Associates is a tourism consulting firm, based in Canada, with special focus on cultural tourism and attracting the cultural tourist. The information above has been compiled via desk research of the internet for clients and key contacts, primarily located in Canada. It is intended to provide contacts with a quick snapshot of currently available market information.
For more information about our services or to discuss how we can assist your organization, government agency or business visit our website at www.mahonjones.com or contact us.

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