'Tourism on the Rise Again' - says World Tourism Organization

Short-term tourism data from the World Tourism Organization, for the first months of 2004 confirm the upward trend already visible at the end of 2003. With the cease of the major geopolitical tensions and in spite of uncertainty constant all over the world as proven by recent terrorist attacks, signs are that travel confidence is back.

The latest issue of the WTO World Tourism Barometer, published by the World Tourism Organization (WTO) end of June, shows that the positive economic performance and prospects in the major tourism generating markets indicate that conditions are present for demand to be back on the track to growth. Long-haul travel is finally also picking-up, particularly out of Europe, but short-haul and domestic travel are still performing comparatively better. The majority of countries with data available report substantial increases for the first months of the year, but of course compared to the negative or very weak baseline of the same period last year.

However, reckoning with this, in most cases the losses of last year are in general fully compensated and still a real increase remains. Results are boosted by the existing pent-up demand after three hard years. All regions, but in particular destinations in Asia and the Pacific show a strong rebound in reaction to the difficulties lived through.

The evaluation of tourism performance by the WTO Panel of Tourism Experts reflects also unmistakably the improvement in results and confidence shown by the figures. The more than 230 Experts from over 100 countries and territories that responded to the periodical survey conducted in the framework of the WTO World Tourism Barometer, rise to a record high in both their evaluation of actual performance in the past four months January to April as well as in their prospects for the coming four months May to August. The WTO Panel as a whole assessed the past four months with an average of 3.7, the highest of all periods up to the moment and up from the 3.5 average evaluation for the period September- December 2003. This means that the number of experts that evaluate the situation as better [4] or much better [5] clearly outnumbers the experts evaluating the situation as equal [3], worse [2] or much worse [1]. And the Barometer is still rising. For the coming four months May to August the panel reaches a score of almost 4, equivalent to better.

Comments WTO Chief of the Market Intelligence and Promotion Department Augusto Huéscar: "Since our team started to compile the WTO World Tourism Barometer last year, we have seen a consistent change for the better of conditions in both the economic and geopolitical basics. Confidence returned among travellers and the industry and the tourism sector is heading for a robust rebound in 2004 on the weak figures of the past years. Of course there are uncertainties left, such as the treat of further terrorist attacks and the high energy prices, but this hardly seems to affect tourism for the moment."

RESULTS BY REGION

Europe

In spite of initial fears, the tragic events of 11 March in Madrid seem not to have influenced the pace of growth in Europe and results are overall positive. Spain ended the year to date until May with a 3.8% increase over the same period last year whereas other important destinations also improved their figures over 2003. The strength of the euro continued to determine traffic distribution while the positive signs from the economies of the main generating markets and some rebound from long-haul markets brought the resurgence to the majority of the European destinations.

In Northern Europe, the United Kingdom kept track with the good performance of last year and ends the period until April with an increase of almost 15% as all its major markets performed positively and in particular the markets of North America. Within Western European main destinations, Germany shows a 10% increase in arrivals for the first quarter of 2004 and 3% in tourism receipts until April while France's overnight stays in hotels and similar establishments during the first five months grew by 1.4% over last year's decrease of 7% in the same period. France confirmed good results from the emerging market of China and a slow return of other long-haul markets, in particular the US and Japan. Countries of Central and Eastern Europe continue with the good results of the last months of 2003. Both major players in the sub-region, Hungary and Poland, reached increases of over 10%, partly benefiting from the extra international exposure created in the framework of their entry in the EU and from favourable exchange rates to the euro. In Southern and East Mediterranean Europe, destinations considerably affected in the first months of 2003 due to the pending conflict in Iraq, such as Cyprus and Turkey, are back on the growth path with increases of 11% (January-May) and 50% (January-April) respectively. As for other major destinations, Spain managed to maintain the growth trend as already mentioned, while Italy with data available limited to the first two months seems to have rebounded strongly (+18%). Portugal on the other hand, though with a positive growth in receipts (+6%) saw overnight stays decrease by 4%.

Asia and the Pacific

Exceptional growth rates can be found in the North-East and South-East Asian countries, most of which have fully recuperated their 2003 losses, whereas South Asia continues on the growing track.

The strong impact of SARS in destinations of North and South-East Asia like China and its territories Hong Kong and Macao, Japan, Malaysia or Singapore have plainly been overcome. Most destinations grew by over 15% in the year to date with growth rates reaching often over 100% during April on the very negative figures of last year. There was a clear resurgence of travel from and to China though outbound travel seems however to be recovering more rapidly than inbound. Arrivals to Japan reported a positive 19% increase stimulated by the recovery of the intraregional market but also by the rebound of long-haul traffic from the US and the European markets.

In South-East Asia the strong Australian dollar has contributed to the positive performance of tourism in Indonesia (+28%), which has also seen an improvement in arrivals from Japan and the ASEAN markets. Arrivals to the Philippines and to Singapore increased by almost 25% while Malaysia reports a growth of almost 60%.

In Oceania Australia and New Zealand grew by 14% (January-May) and 12% (January-April) respectively, recovering thus from the losses of the SARS's months as intraregional traffic stabilizes while in South Asia the political stability and the expansion of the Indian economy seem to continue driving tourism expansion. Arrivals to India increased by 24% after a very positive performance in 2003 (+15%) while arrivals to Sri Lanka and Nepal also did positively (+10% and +43% respectively).

Americas

The evolution of tourism in the Americas mainly continues the pattern already observed in previous months. Destinations in the Caribbean, Central and South America kept their very positive performance enjoying the competitive advantage of a weak dollar and of the search for "known and nearby" destinations in the North American generating markets whereas North America's figures continue to improve.

A special note to the United States, where inbound figures during the first four months are positive for the first time since 2001, though still far from the volume achieved then. Particular good results were obtained in the major neighbouring source markets of Canada and Mexico, but also in the long-haul markets of Asia and Europe with the continuing good performance of the UK. Arrivals and receipts have also increased in Mexico (+13% and +14% respectively) as the US market starts to rebound and the exchange rate to the peso became even more favourable. Canada, also very much dependent on the US market, is gradually returning to positive figures, although not yet very impressive, as the comparatively strong Canadian dollar is still a major restraining factor for the US market.

Middle East

Most destinations in the Middle East are looking back on a particular buoyant winter and spring season after an already overall strong 2003. Intraregional tourism continues to thrive, partly fuelled by the reluctance felt of travelling to other regions, but above all by the improvements in tourism supply on offer and the increasingly professional marketing and promotion by the destinations of the region. Available data shows increases of 10% in Jordan (January-February) and of more than 10% in Dubai (first quarter). In Egypt, the enduring devaluation of the Egyptian pound contributed to the year-to-year growth of over 70% in tourist arrivals up to May.

Africa

In North Africa the alleviation of the geopolitical tension over the war in Iraq and the favourable exchange rates to the euro and the British pound have contributed to improving results. Arrivals to Tunisia grew by 20%, continuing thus the recovery of the last two quarters of 2003. In Morocco the liberalization of air traffic from February on seems to have already impacted in the performance of the destination that saw arrivals growing by almost 20% over an already positive first quarter of 2003. Interregional travel to Southern Africa, on the other hand, has weakened, as the stronger Rand erodes the competitive price advantage.

INTERNATIONAL TOURISM RECEIPTS AND WORLD'S TOP DESTINATIONS 2003

The latest issue of the WTO World Tourism Barometer also includes the first WTO estimates on 2003 International Tourism Receipts worldwide and by region as well as the ranking of the Top tourism destinations in terms of Tourist Arrivals and Tourism Receipts.

International Tourism Receipts 2003

At this time of the year, most countries have completed their 2003 series with regard to receipts for international tourism relating to overnight as well as same-day trips.

An initial analysis of this data reveals that international tourism receipts went up by some US dollar 40 billion, from US dollar 474 billion to an estimated US dollar 514 billion. This apparent substantial increase is above all the reflection of the strong depreciation of the US dollar versus many other currencies, in particular the euro. In 2003 one euro bought on average of almost 20% more US dollar than in 2002, receipts earned in euro area destinations, which account for over a quarter of worldwide receipts, expressed in dollar terms will magnify, even if receipts in euro terms were constant or decreased.

The same is true to a greater or lesser extent for most other European destinations, for many destinations in Asia and the Pacific, for Canada and for South Africa. For this reason, expressing worldwide receipts in a currency other than the US dollar would change the picture completely. For instance, computed in euros worldwide receipts decreased by some euro 50 billion, from euro 502 billion in 2002 to euro 455 billion in 2003. A way to compensate for this distortion caused by exchange rate fluctuations is to express the evolution of receipts in weighted local currencies, while at the same time correcting for inflation. Expressed in this way, international tourism receipts are estimated to have decreased by around 2% in 2003, while 2002 was still just positive at +0.3%. This result is basically consistent with the data on international tourist arrivals as reported in the January issue of the WTO World Tourism Barometer, showing a decrease in international tourist arrivals of 1.2% in 2003. In line with the arrival data, receipts decreased most in destinations in North-East and South-East Asia and Oceania.

Receipts also decreased in North America, while they grew in the Caribbean, and in Central and South America. The figures for Europe clearly reflect the weak economy in the region in the past year, with the number of arrivals about equal but receipts declining by some 3%. In Africa receipts also decreased in spite of the increase recorded in arrivals. The Middle East was the only region able to close the year with a positive result.

World's Top Tourism Destinations 2003

In spite of last year's variable performance the ranking has not altered significantly. The first four positions in terms of tourist arrivals as well as in terms of tourism receipts remain unchanged, with France and the United States as unchallenged leaders. In the ranking by International Tourist Arrivals the most significant modification is experienced by Canada, moving from the 7th to the 10th position as a result of the 13% decrease suffered in 2003. The benefiting destinations were Austria, climbing 2 positions to 7th, and Germany, climbing one to 9th. The order of tourism earners reflects the impact of SARS and the exchange rate fluctuations experienced in 2003, with European destinations moving up and Asian destinations moving down. Most likely, however, the latter will be temporary as Asian destinations are expected quickly to regain lost ground.