Tourism One Minute Report
A global market scan in one minute or less.
January 3, 2017

GLOBAL TRAVEL PREDICTIONS FOR 2017 UP IN THE AIR

With a number of unpredictable factors facing the global economy, expert opinion varies on growth estimates for outbound leisure and business travel in 2017, all of them modest. According to the WTTC, the direct contribution of travel and tourism to global GDP was USD$2.23 trillion (3% of total GDP) in 2015 and is anticipated to rise by 3.3% in 20171. Oxford Economics presents a slightly more positive preliminary forecast, calling for an increase of 4.2% to global outbound travel in 2017 (though it is anticipated that this estimate will change throughout the year)2.

Affecting factors include: the slowdown of the Chinese economy, depressed oil prices, the UK’s departure from the EU, growing populist politics and increasing security concerns3, terrorism and the US election results.

Here’s the latest on outbound travel on some major markets…

NORTH AMERICA

Canada: Outbound travel by Canadians increased 5% in September 2016 and 5.8% in October compared to the same months of 2015. Overall, outbound travel in 2016 from Canada between January and October decreased 3.7% compared to the same period of last year – from 27.9 to 26.9 million travellers4.

Hitting the lowest rate in five months, unemployment in Canada fell to 6.8% in November (beating market expectations of 7% – a rate it had held for the previous 3 months)5. Following a noteworthy leap to 109.4 in November, Canadian consumer confidence has increased further in December to 113.76.

United States: Outbound travel from the United Sates increased 8.8% in September YOY. Similarly, the 9-month span of January to September saw an increase in of 8.2% in outbound travel. YTD, 60.9 million Americans embarked for international destinations. The most significant increases during the year took place in February (10.8%), March (12.2%) and July (10.2%). The greatest market share was held by Mexico (37.2%) and Canada (18.4%), followed closely by Europe and the Caribbean. The most significant jump in % change in air travel numbers was to Canada, registering 24.4% (Jan-Sept)7.

US consumer confidence leaped to the highest it has been since January of 2004 for the final month of 2016 to 98.2, compared to 93.8 in November. Consumers anticipate a positive impact on the economy as a result of president Trump’s election8. The number of unemployed Americans decreased by 387,000 in November, dropping the US unemployment rate to 4.6% – the lowest it has been since August 2007. The all-time high for the rate was November ’82, when it reached 10.8%. It is expected to trend at around 6% in 20209.

EUROPE

Despite a year that included a significant migrant crisis, Brexit and the election of Donald Trump, the Eurozone’s moderate economic recovery held throughout 2016, albeit somewhat tepid. Q3 saw economic growth of 0.3% quarter/quarter, which followed the 0.3% expansion of Q2 and the 0.5% increase seen in Q1. Economists anticipate Q4 will see growth of up to 0.4% following a drop in unemployment and an increase in the economic sentiment ((“Economic Snapshot for the Euro Area”. Focus Economics, December 21, 2016)).

Ireland: Following Britain’s decision to leave the EU in June there has been a surge in the number of passport applicants. Well over 722,000 Irish passports were issued in 2016 (to end of November), compared to 655,000 issued in 2015. An Irish passport will allow for the holder to move and work within other EU member states once the UK withdraws10).

Germany: With 87.4 million international trips taken in 2016, Germany is the largest outbound market in Europe. Leisure travel remains the most affluent market, while business travel has seen a decline due to many German companies cutting travel budgets. Outbound travel from Germany is anticipated to increase to 94.7 million by 2021 with subsequent travel spending anticipated to reach $150.3 million USD11.

Italy: On December 4, Italian voters rejected a referendum to make a series of changes to the constitution, and the Italian prime minister resigned. The resulting chaos has impacted the stability of Italian banks, as the PM was working on plans to recapitalize the banks, many of which are saddled with bad business loans. A linchpin of the Italian financial system is the 500-year-old Banca Monte dei Paschi di Siena SpA (BMP), the oldest surviving bank in the world and the third largest bank in Italy. Its loss could trigger the collapse of other banks and lead to a renewed financial crisis in Europe, where banks continually lend money to each other12.

France: While modest, Q3 saw 0.2% expansion in the French economy, a noteworthy rebound from the unexpected 0.1% contraction the economy saw in Q2. Year-on-year, GDP growth in 2016 has slowed significantly compared to 1.2% and 1.1% in Q2 and Q3 respectively last year13

ASIA PACIFIC

China: Outbound travel from China has seen significant growth since 1998 when the annual growth surpassed 40%. Growth of 18 – 22% was maintained from 2010 to 2012 and since 2013, China has continued to see year on year growth, but at a reduced rate14. 53.03 million Chinese travelled internationally in the first half of this year, an increase of 4.3% over the same period in 2015. The top destinations Chinese travellers ventured to in 2016 included; Thailand, South Korea, Japan, Singapore, Malaysia, United States and Indonesia.

Less than 6% of Chinese residents currently hold a passport. With 117 million outbound trips taken in 2015 alone, there is astronomical potential to see growth in outbound travel in the coming years. With more than 94% of the Chinese population as potential outbound tourists, international travel is anticipated to gain momentum in the next year and through to 2020 – when outbound is projected to reach 150 million15.

Japan: Outbound travel from Japan in September, October and November saw year-on-year increases of 1.8%, 3.6% and 10.6% respectively. For the months January – November, 15.66 million Japanese embarked on international travel – an increase of 5.4% from the same period last year16.

Australia: Outbound travel from Australia tallied 845,000 in October – up 2.2% from the month prior and 4.6% from October 2015. This follows monthly decreases of 0.7% in August 2016 and 0.2% in September 2016 ((“A Overseas Arrivals and Departures, Australia, Oct 2016”. Australian Bureau of Statistics, December 12, 2016)).

WORD OF MOUTH

“If certain groups are targeted, if hate speech is tolerated against certain ethnicities, inbound travel will dry up…”

Henry Harteveldt, founder of Atmosphere Research Group, a travel research company, speaking to how the election of Donald Trump will affect travel to the US. Without question, the perception of how welcoming the US will be for many cultures, particularly growth-oriented third-world markets, will be a factor. Related issues, like the hardening of customs and border processes and isolationist immigration policies may also play a major role. Above all, however, the strengthening US dollar will have the greatest negative impact on travel into the country, while stimulating the outpouring of US tourists.

  1. “Travel and Tourism Economic Impact 2016 World”. World Travel and Tourism Council. December 2016 []
  2. “Nobilo, Igor. “Tourism Season 2017 Predicted to Break Records”. Croatia News, November 18, 2016 []
  3. “Global Business Travel Forecast 2017: Subdued Growth”. Travel Industry Today, November 17, 2016 []
  4. “One or more nights trips by residents returning to Canada, by province of re-entry, year to date”. Statistics Canada, December 19, 2016 []
  5. “Canada Unemployment Rate”. Trading Economics, December 2, 2016 []
  6. “The Conference Board Consumer Confidence Index Increased in December”. The Conference Board of Canada, December 27, 2016 []
  7. “US Citizen Travel to International Regions”. Office of Travel and Tourism Industries, December 1, 2016 []
  8. “United States Consumer Sentiment”. Trading Economics, December 2016 []
  9. US Unemployment Rate. Trading Economics, December 2016 []
  10. Ireland Department of Foreign Affairs and Trade, Passport Stats, Jan-Nov (2015 vs 2016 []
  11. “Source Market Insights: Germany”. PR Newswire, December 17, 2016 []
  12. “Now that Italy has Rejected Constitutional Amendments, What’s Next?”, The New York Times, December 5, 2016 []
  13. “France: Economy Rebounds Softly in Q3”. Focus Economics, November 29, 2016 []
  14. Shuang, Feng. “Outbound Tourism to see Steady, Slower Rise”. China Daily, December 27, 2016 []
  15. Shuang, Feng. “Outbound Tourism to see Steady, Slower Rise”. China Daily, December 27, 2016 []
  16. “Foreign Visitors and Japan Departures”. Japan National Tourism Organization, December 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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