Tourism One Minute Report
A global market scan in one minute or less.
March 22, 2016

TOURISM TO CONTINUE STRONG PERFORMANCE IN 2016

2015 marked the 6th consecutive year of above-average global tourism growth, with international arrivals increasing by 4% or more every year since 20101. Last year, travel and tourism added 7.2 million jobs to the global economy and contributed over US$7.2 trillion in GDP, outpacing overall GDP growth in 127 countries, including Iceland, Japan, Mexico, New Zealand, Qatar, Saudi Arabia, Thailand, and Uganda2. Travel is expected to continue to grow in 2016, but at a slightly lower level as compared to the previous two years3.

NORTH AMERICA

CANADA: 3.5 million Canadians travelled to the United States in January, a 2% increase from the number of trips taken in December. Outbound travel to overseas destinations decreased 0.8% in January compared to December4.

Canada’s economy lost an unexpected 2,300 jobs in January5. Joblessness rose to 7.3% for the month of February from 7.2% the month prior bringing the rate to the highest it has been since March of 20136. In perplexing contrast, the index of consumer confidence rose 3.7 points in February to 83.7 – the first index gain in four months.7.

UNITED STATES: US travellers embarked on 5.35 million international trips in November 2015, an increase of 8.8% over November 2014. January to November of 2015 saw 67 million international trips – an increase of 7.7% compared to the same 11 months in 20148.

Unemployment in the United States remained unchanged at 4.9% in January and February – remaining at the lowest level it has been since April of 2008. The current unemployment rate is down 0.6% from last year9. Consumer confidence in the United States registered 91.7 in February (higher than preliminary estimates), a decrease of 0.3 from 92 in January10.

EUROPE

In January, the Eurozone’s unemployment rate fell to its lowest rate – 10.3% – since 2011 (Eurostat).The European Central Bank has forecast growth of 1.4% in 2016 for the Eurozone. This revision bumps growth estimates down slightly from initial estimates this year11.

UK: Visits abroad by UK residents increased by 9% in 2015. Visits to North America rose by 6%, Europe by 9% and other countries by 6%12.

Unemployment in the UK dropped to 1.68 million between November 2015 and January 2016, down 28,000 from the previous quarter. The unemployment rate remained unchanged at 5.1% – continuing the decade-low rate. 31.42 million are currently working, an increase of 478,000 compared to the same time last year. At a rate of 74.1% employment is the joint highest it has been since records began in 1971 and average earnings increased by 2.1% in January13.

FRANCE: Unemployment in France dropped to 10.3% in the final quarter of 2015, an improvement from 10.4% in the previous quarter. The current rate sits at the lowest figure since the second quarter of 201514. France’s economy is predicted to grow only 1.4% in 2016 (Reuters, “France’s economy growth to be less than 1.4% in 2016: Central bank guv Francois Villeroy de Galhau”, March 15, 2016)).

GERMANY: German unemployment sat at 4.4% in the final month of 2015 with that number decreasing a further 0.1% in January to 4.3% – a new 35-year low for the country15.

German outbound travel to Egypt, Tunisia and Turkey has dropped by around 40% compared with the same time last year, no doubt a reflection of the concern surrounding safety and security. However, even amidst the arrival of hundreds of thousands of migrants, German travel to Greece has remained unaffected16.

GREECE: The Greek unemployment rate decreased marginally from 24.4% in November to 24% in December, 2015 – the lowest rate recorded since May, 201217. With an unemployment level that remains more than double the Eurozone’s average of 10.3%, many companies are beginning to relocate to neighboring countries as a result of the heavy taxing. Following three emergency bailouts and the biggest debt restructuring in history, speculation about Greece dropping out of the currency union continues18.

ASIA PACIFIC

CHINA: China is expected to lay off a record 1.8 million steel and coal workers in an effort to reduce the country’s industrial overcapacity and reform its state-run enterprises. Government has set up a 100 billion yuan ($15.3 billion) fund to assist companies in resettling workers during the restructuring19. Following the slowest expansion the country has seen in 25 years, China has unveiled a new five-year plan for the economy, aiming at a growth of 6.5%- 7% per year by 202020.

Budget travel amongst younger Chinese backpackers is beginning to increase in popularity. More than 77 million Chinese backpackers travelled internationally in 2014 62.4% of which were aged 21 to 30 years21.

JAPAN: The first month of 2016 has shown marked improvement for outbound travel from Japan. 1.27 million Japanese embarked on international travel, an increase of 3.3% from the 1.23 million in January of 2015. Preliminary results also reflect a positive increase for travel in February with an increase of 5.8% year over year to 1.33 million international travelers22.

AUSTRALIA: Outbound travel from Australia increased 0.7% from December 2015 to January 2016 over the same period last year, with 821,500 travelers leaving the country23.

At 99.1 index points, consumer confidence in Australia was the lowest in three months in March 2016. Interestingly, Australia’s CC averaged 101.1 from 1974 to 2016, reaching an all-time high of 127.7 in January of 200524.

WORD OF MOUTH

“It appears that travelers are taking the Zika virus threat very seriously as almost half of those surveyed said it would have a negative impact on them traveling to infected areas…”

A quote by Steve Glenn, CEO of Executive Travel, the Nebraska-based travel management company that recently completed a survey of 880 travellers, asking them “Would the threat of the Zika virus keep you from traveling this year to any reported infected areas (i.e. South and Central America, Caribbean and parts of Mexico)?” 49% of respondents said yes.

There are currently 30 countries worldwide with active transmission of the Zika disease. Many tourists are beginning to re-route travel plans. Pregnant women and those planning to conceive have been warned against travelling to affected areas including Brazil, Mexico, Dominican Republic and Panama, all of which are seeing a decline in inbound travel.

Combined, the 30 countries affected receive more than $53.2 billion annually from international tourism – Mexico brought in more than $14 billion in 2013 alone. Particular concern right now surrounds Brazil – the country set to host the 2016 Summer Olympics. Despite calling it a “public health emergency of international concern”, there has been no travel ban issued by the World Health Organization to date25.

 

  1. UNWTO press release, January 18, 2016 []
  2. World Travel and Tourism Council press release, March 21, 2016 []
  3. op. cit. []
  4. “Travel Between Canada and Other Countries, January 2016”. Statistics Canada, March 17, 2016 []
  5. “Jobless rate near three year high, as Canada loses 2,300 jobs in February”. CBC News, March 11, 2016 []
  6. “Canada Unemployment Rate”. Trading Economics, March 11, 2016 []
  7. Andes, Julie. “Index of Consumer Confidence: February 2016”. The Conference Board of Canada, March 4, 2016 []
  8. “US Citizen Traffic to Overseas Regions, Canada and Mexico.” National Travel and Tourism Office, February 1, 2016 []
  9. “US Unemployment Rate”. Trading Economics, March 4, 2016 []
  10. “United States Consumer Sentiment”. Trading Economics, February 26, 2016 []
  11. “France’s Economy Growth to be less than 1.4% in 2016: Central bank GUV Francois Villeroy de Galhau”. Economic Times, March 15, 2016 []
  12. UK Office for National Statistics, February 19, 2016 []
  13. “UK Unemployment Drops 28,000”. BBC News, March 16, 2016 []
  14. “France Unemployment Rate”. Trading Economics, March 3, 2015 []
  15. “Germany Unemployment Rate 1950 – 2016”. Trading Economics, March 1, 2016 []
  16. “German Summer Bookings for Turkey, Egypt, Tunisia Drop 40% but Greece Holding up”. Ekathimerini.com, March 3, 2016 []
  17. “Greek Unemployment Rate 1950 – 2016”. Trading Economics, Mar, 10, 2016 []
  18. Smith, Helena. “Grexit Back on the Agenda again as Greek Economy Unravels”. The Guardian, March 6, 2016 []
  19. “China Expects 1.8 million coal, steel layoffs on Capacity Cuts”. Bloomberg Business, February 29, 2016 []
  20. “China Approves new five-year plan as Li reassures on Economy”. BBC News. March 16, 2016 []
  21. “Budget backpacking in vogue among young Chinese travellers”. Ecns.cn, March 9, 2016 []
  22. 2016 Foreign Visitors and Japanese Departures”. Japan National Tourism Organization, March, 2016 []
  23. “Overseas Arrivals and Departures, Australia”. Australian Bureau of Statistics, March 7, 2016 []
  24. “Australia Consumer Confidence”. Trading Economics, March 8, 2016 []
  25. “Brazil and other Countries with Zika Virus could see income from tourism drop by up to $53.2 billion in a single year”. Mail Online, February 15, 2016 []

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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