Tourism One Minute Report
A global market scan in one minute or less.
November 28, 2014

READJUSTING EXPECTATIONS FOR 2015

Three years ago the IMF anticipated the world economy would be back on track and growing at 4.8% by 2015. The US appears to be on track with these expectations with an expected growth of around 4% in 20151; however the BRIC countries (Brazil, Russia, India and China), Europe and Japan are falling short of growth projections. Although China’s projected 7.1% growth is higher than other regions, it is at its lowest level in 15 years. Global growth has been readjusted to 3.2% for 20152.

Here’s what’s happening in some key outbound markets…

NORTH AMERICA

CANADA: Outbound international travel by Canadians decreased 1.9% in September compared to the same month last year. Canadian travel to the United States was down 5.8% year over year in September3. International travel increased 1.4% from January to September of this year4.

The 0.3% drop in unemployment from 6.8% in September to 6.5% in October brings the Canadian unemployment rate down to the lowest it has been since November 20085.

UNITED STATES: 6.82 million Americans travelled internationally in August 2014, reflecting an increase of 6.3% over August 2013. January to August of 2014 registered an increase of 9.7% compared to the same timeframe last year6.

The US economy continues to improve – the second quarter of 2014 saw growth at the fastest pace in nearly three years, and unemployment just hit a six-year low (5.8% in October)7. However, US consumers are still cautious – after 4 straight months of increases, consumer confidence declined 4.4 points in September (compared to August), but rebounded again in October to 94.5, potentially indicating consumers’ optimism about their earning potential8.

EUROPE

According to a report from the GBTA Foundation9, in the largest boost in business travel spending since 2010, the European business travel markets of the UK, France, Italy, Spain and Germany advanced by 4.3% in first half of this year.

Business travel between the five markets is anticipated to hit €147.1B ($186.4 billion US) in 2014, a 4.9% growth over 2013. The projected rate of growth is expected to increase by another 6.6% in 2015, to €156.8B ($198.7 billion US), as overall spending gains momentum. The economy does not share the same optimistic forecast, however. With a mere 0.8% growth in the first quarter and stagnant growth in the second quarter of this year, unemployment rates remain high throughout Europe and projections anticipate a meager 0.9% growth for the year. 1.7% growth is anticipated in 2015.

UNITED KINGDOM: UK residents’ overseas travel decreased by 2% in July, August and September. However, travel to North America increased by 10% in that time period10. With international expenditures of £26.5 billion ($41.3 billion US), the UK had the second highest business travel spending rate in Western Europe in 2013. It is expected that number will increase 5% by end of year, and 6% in 2015. International business travel is projected to grow 3.7% in 2014 and see significant growth of 12.1% in 201511.

GERMANY: Germans invested €10.4 billion ($14.3 billion US) on international business spending in the second quarter of 2014, an increase of 7.5% from the second quarter of 2013. Overall spending is expected to have grown 6.5% for the year 2014 by the end of December. Projections from The Global Business Travel Association (GBTA) estimate German business travel will grow 7.4% in 2014 followed by 10.8% growth in 2015. These positive appraisals follow outbound business travel growth in 2013, increasing 5.3% over 201212.

FRANCE: The second quarter of this year saw a 1.3% increase in business travel spending to €6.6 billion ($9 billion USD). Following noteworthy drops in 2012-2013, French spending abroad is expected to have grown a total of 5.4% this year and 2.9% in 2015. Total international business travel from France is expected to increase by 3.3% this year, despite the rather lethargic economy. 4.6% growth is anticipated for 2015 as well13.

ASIA & THE PACIFIC

CHINA: Following Chinese President Xi Jinping’s catchphrase of creating a “new normal” the Chinese economy is switching gears. Rather than the rapid expansion the economy has been striving towards, the focus now is absorbing the large-scale stimulus packages that were rolled out. The IMF anticipates 7.4% growth for the country this year – the slowest growth China has seen in 24 years14.

Future growth in Chinese outbound travel will be greatly affected by documentation barriers. At the moment, around 5% of the Chinese population holds a passport. Many countries are working on making visas easier to access: for example, the Maldives have introduced a visa-waiver scheme, which has resulted in a 45% increase in visits15. Last week, US President Obama announced a deal with China to extend the validity of short-term tourist and business visas for travellers in both directions from one to 10 years, a step that was praised by Brand USA. Canada introduced 10-year visas or China, Brazil, India and Mexico in 201116.

JAPAN: International outbound travel continues to decline in Japan compared to the number of outbound travellers in 2013. September and October saw decreases by 2.1% and 5.3% respectively. January to October 2014 registered a year-to-date decline of 3.1% compared to October 201317. The Japanese government announced this month that the economy shrank 1.6% in the third quarter of 2014, following a 7.3% contraction in the second quarter – officially putting the country into a recession18.

AUSTRALIA: Outbound international travel from Australia remained relatively unchanged from July through September; dipping marginally by 0.6% from June to July, increasing 0.1% in August and decreasing by 0.6% again in September. 759,000 Australians departed for international destinations in September, a 3.2% increase from September 201319.

WORD OF MOUTH

“I Hate Thailand”

This is the title of a controversial video – called a “romantic comedy short film” – produced by Thailand’s tourism authority and funded by the Thai government, using a counter-intuitive strategy to attract tourists after the country’s image as a tourism destination was marred by a military coup in May and the brutal murders of two British tourists in September. The video’s protagonist starts out hating Thailand after he assumes his missing bag containing passport, money, etc., was stolen. However, the film has a happy ending in which the hero experiences the gracious generosity of the Thai people and their culture – and realizes that a visit to the area can be much more than partying and having fun at the beach20. View the video here.
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  1. IMF, “World Economic Outlook”, April 2014 []
  2. Coy, Peter. “2015 Global Economic Outlook: Better Than 2014 – but Not By Much”. Bloomberg Businessweek, November 6, 2014 []
  3. “One or more nights’ trips by residents returning to Canada, by province of re-entry, current month”. Statistics Canada, November 18, 2014 []
  4. “One or more nights’ trips by residents returning to Canada, by province of re-entry, year to date”. Statistics Canada, November 18, 2014 []
  5. Cunha, Carolina. “Canada Unemployment Rate Down to 6-Year Low”. Trading Economics, November 7, 2014 []
  6. “US Citizen Travel to International Regions 2014” []
  7. Taborda, Joana. “US Unemployment Rate Drops Further”, Trading Economics, November 7, 2014 []
  8. US Conference Board, “The Conference Board Consumer Confidence Index Rebounds”, October 28, 2014 []
  9. “Western Europe Business Travel Spend to Grow in 2014 and 2015”. Global Travel Industry News, November 13, 2014 []
  10. UK Office for National Statistics, “UK residents’ visits abroad by month”, September 2014 []
  11. “Western Europe Business Travel Spend to Grow in 2014 and 2015”. Global Travel Industry News, November 13, 2014 []
  12. Ibid []
  13. Ibid []
  14. Wardell, Jane. “China’s economy Experiencing ‘Period of Pain’: Vice Minister”. Reuters, November 15, 2014” []
  15. “Coming to a beach near you.” The Economist, April 19th, 2014 []
  16. Michelle Baran, “Industry lauds pact with China for bilateral extensions of visas”. Travel Weekly, November 17, 2014 []
  17. “2014 Foreign Visitors & Japanese Departures”. Japan National Tourism Organization, November 2014 []
  18. Zotomayor, “No change expected in Japanese outbound travel in next 3 months”, Marianas Variety, November 28, 2014 []
  19. “Overseas Departures and Arrivals, Australia 2014”. Australian Bureau of Statistics, November 6, 2014 []
  20. “Thailand’s tricky tourism advert”, Stuff.co.nz, November 27, 2014 []

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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