Transcript Document

Outlook for NI tourism
NIHF Tourism Summit
Helen McDermott
20th March 2015
Overview
2
Overview
 Global economic overview
 Global tourism performance
 Northern Ireland economic outlook
 Structure of NI tourism industry
 NI tourism outlook & key challenges
3
Global economic overview
4
Global GDP grew by 2.6% in 2014…
World: GDP growth Emerging Markets vs Advanced Economies
10%
8%
6%
4%
2%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
-2%
-4%
-6%
Source: Oxford Economics
5
Advanced Economies
Emerging Markets
World
…with a weak end to the year…
World: Monthly export indicator
Standardised index
2.0
1.0
0.0
-1.0
Indicator based on
US, German and
Chinese export
orders surveys
-2.0
-3.0
-4.0
2006 2007 2008 2009 2010 2011 2012 2013 2014
Source : Oxford Economics/Haver Analytics
6
…and China slowing markedly…
7
…contributing to drop in oil prices...
2009: Oil price fell from $147 to
$40 but then rose again as
capacity was tight
1985/6: Oil price
halved and then
remained low as
supply was strong
8
…while oil supply remains high...
World: Oil supply and demand
% year
2.5
Demand
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
2013
Source : IEA/Oxford Economics
9
2014
Supply
…there will be winners and losers…
10
…but in net terms this will boost world growth...
Global GDP growth, real US$
Annual % change
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2014
Source: Oxford Economics
11
2015
2016
2017
2018
2019
US$ appreciation will dampen US exports…
US dollar exchange rate, vs Euro and British pound
US$ per currency
2.5
US$ vs Euro
US$ vs GBP
2.0
1.5
1.0
0.5
0.0
2017
2016
2015
2014
2013
2012
2011
2010
12
2009
2008
2007
2006
Source: Oxford Economics
…but good news elsewhere
Exports growth across key markets
7%
2014
2015
2016
6%
5.7%
5.3%
4.9%
5%
4.6%
4.2%
4%
3.7%
4.4%
3.7%
3.8%
3.7%
3.5%
3.4%
3.1%
3%
2.7%
2%
1%
0.4%
0%
US
Source: Oxford Economics
13
UK
Eurozone
Germany
France
Emerging markets showing no signs of improvement
GDP growth, real local currency
Annual % change
10.0%
2014
2015
8.0%
2016
2017
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
Brazil
Source: Oxford Economics
14
China
India
Russia
Risks to the outlook skewed towards the downside…
World GDP growth under 4 scenarios, real local currency
Annual % change
Forecast
Baseline
4.5%
Greek exit of Eurozone
Investment stalls in China
4.0%
World GDP picks as oil prices fall
further
3.5%
3.0%
2.5%
2.0%
2010
2011
Source: Oxford Economics
15
2012
2013
2014
2015
2016
2017
2018
2019
Greek exit is big threat to Eurozone recovery
16
Global tourism performance
17
Visitor numbers forecast to slow in 2015…
Global overnight visits and GDP (US$, real) growth
Annual % change
14.0%
Forecast
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
Overnight visits growth
-4.0%
GDP, real US$ growth
-6.0%
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
18
2004
2003
2002
2001
2000
Source: Tourism Economics
…driven by weak growth from Russia and Asia EMs
Back to menu
Outbound overnight visits growth
Annual % change
10%
9.2%
9%
8%
7%
6.6%
6.1%
6.0%
6%
5%
2014
6.4%
2015
5.4%
4.9%
4.9%
2016
5.1%
4.8%
4.5%
4%
3.6%
4.4%
3.9%
3.8%
3.4%
3.1%
3%
2%
1%
0.6%
0%
Global
Source: Tourism Economics
19
Americas
Europe
Asia
Middle East
Africa
…and Ukraine also down, but at a lower volume
Back to menu
Outbound visits growth, Emerging Europe
Annual % change
8%
6.4%
6%
5.3%
4.9%
3.9%
4%
2.7%
1.8%
1.6%
2%
3.2%
2014
0%
2015
-0.3%
-0.7%
2016
-2%
-2.1%
-2.8%
-4%
-4.0%
-6%
-8%
-8.7%
-10%
-12%
-10.7%
Russian Federation
Source: Tourism Economics
20
Poland
Ukraine
Hungary
Czech Republic
Russian weakness can be seen in sub-region trends…
Outbound visits growth from Europe by sub-region, 2014-16
6%
5%
5.0%
3.8%
4%
3.8%
2.8%
3%
3.4%
2.7%
1.7%
2%
1%
0.6%
0%
-1%
-2%
-3%
2014
2015
2016
-3.3%
Western Europe
Source: Tourism Economics
Emerging Europe
-4%
21
Europe
Northern Ireland economic outlook
22
Recovery finally picked up in 2014, but lags behind UK…
GVA growth, NI vs UK
Annual % change
5.0%
Forecast
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
United Kingdom
Northern Ireland
-5.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Oxford Economics
23
…however, employment growth expected to stagnate…
Employment growth, NI vs UK
Annual % change
4.0%
Forecast
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
United Kingdom
-3.0%
Northern Ireland
-4.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Oxford Economics
24
…with the return to pre-recession peak remaining evasive
Employment (000s), NI vs UK
UK employment (000s)
36,000.0
NI pre-recession peak
NI employment (000s)
Forecast
35,000.0
880.0
860.0
34,000.0
840.0
33,000.0
UK pre-recession peak
820.0
32,000.0
800.0
31,000.0
30,000.0
United Kingdom
Northern Ireland
29,000.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Oxford Economics
25
780.0
760.0
Mixed fortunes for tourism related sectors recently…
Contribution to employment growth by sector, 2010-14
Construction
Agriculture, forestry, etc
Wholesale & retail
Public admin
Transportation & storage
Financial & insurance
Accommodation & FBS
Water supply
Mining & quarrying
Electricity, gas, etc
Professional services
Real estate
Education
Other services
Arts, entertainment, etc
Information & comms
Admin & support
Manufacturing
Health & social work
-164.3%
-200%
Source: Oxford Economics
26
-7,000 jobs
2010-14
-76.0%
-57.9%
-56.3%
-50.6%
-29.2%
-10.8%
-1.5%
-0.7%
-0.2%
6.0%
19.0%
20.4%
22.7%
25.1%
29.5%
71.4%
76.6%
76.8%
-150%
-100%
-50%
0%
Net contribution to total jobs growth
50%
100%
…but more promising outlook
Contribution to employment growth by sector, 2014-20
Public admin
Manufacturing
Education
Health & social work
Agriculture, forestry, etc
Mining & quarrying
Financial & insurance
Water supply
Electricity, gas, etc
Real estate
Wholesale & retail
Arts, entertainment, etc
Other services
Accommodation & FBS
Information & comms
Transportation & storage
Professional services
Construction
Admin & support
-81.5%
-100%
Source: Oxford Economics
27
+11,000 jobs
2014-20
-25.5%
-22.3%
-11.4%
-3.3%
-1.3%
-1.2%
-0.2%
-0.1%
4.6%
11.7%
18.9%
19.4%
20.5%
24.8%
27.2%
32.8%
33.6%
53.3%
-80%
-60%
-40%
-20%
0%
20%
Net contribution to total jobs growth
40%
60%
80%
Unemployment remains high but growth to track UK
Unemployment rate (claimant count), NI vs UK
Unemployment rate (%)
8.0%
Forecast
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
United Kingdom
Northern Ireland
0.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Oxford Economics
28
Structure of Northern Ireland tourism
29
Tourism is a key contributor to NI economy…
Sectoral contribution to total GVA, NI, 2013
Electricity, gas, etc
Agriculture, forestry, etc
Water supply
Arts, entertainment, etc
Other services
Direct Tourism
Accommodation & FBS
Admin & support
Information & comms
Transportation & storage
Professional services
Financial & insurance
Construction
Total Tourism
Real estate
Education
Health & social work
Public admin
Manufacturing
Wholesale & retail
1.0%
1.2%
1.3%
2.2%
2.4%
2.4%
3.2%
3.2%
3.7%
4.4%
4.4%
5.4%
6.6%
8.1%
8.5%
10.4%
11.2%
13.3%
15.0%
0%
2%
Source: Oxford Economics, NITB
30
UK total tourism contribution = 11.4%
World total tourism contribution = 9.5%
1.0%
4%
6%
8%
10%
% share of total economy GVA
12%
14%
16%
…and supports 1 in every 15 jobs across the region
Sectoral contribution to total jobs, NI, 2013
Electricity, gas, etc
Water supply
Real estate
Information & comms
Financial & insurance
Arts, entertainment, etc
Other services
Transportation & storage
Agriculture, forestry, etc
Direct Tourism
Professional services
Accommodation & FBS
Admin & support
Total Tourism
Construction
Public admin
Education
Manufacturing
Health & social work
Wholesale & retail
0.2%
0.9%
2.3%
2.3%
2.4%
2.4%
3.8%
3.9%
3.9%
4.3%
5.5%
5.8%
6.5%
7.0%
7.2%
9.0%
9.8%
16.2%
16.2%
0%
2%
Source: Oxford Economics, NITB
31
UK total tourism contribution = 11.7%
World total tourism contribution = 8.9%
0.7%
4%
6%
8%
10%
12%
% share of total economy GVA
14%
16%
18%
NI tourism dominated by domestic visitors…
% share of visits to/in Northern Ireland, 2013
1.1% 2.2%
2.9%
1.3%
3.2%
Northern Ireland domestic
Great Britain
Republic of Ireland
US
9.8%
Germany
48.6%
France
Canada
Spain
Italy
28.6%
Netherlands
Rest of Mainland Europe
Other
32
…which has remained relatively stable in recent years
Trips taken by NI residents in recent years
5,000
4,500
4,000
4,713
4,584
2011
2012
3,906
2013
3,500
3,000
2,500
2,046
2,018
2,000
1,983
1,500
1,000
500
0
Source: NISRA
33
Within NI
RoI / GB
£192mn
expenditure by NI
residents during
trips within NI =
26.6% of total
tourism spending
However, visitors from outside of NI bring greater return
Average length of stay by origin market
Average spend per trip by origin market
300
6
NI domestic
5.21
RoI
5
£280
NI domestic
RoI
250
GB & overseas
GB & overseas
200
4
3
2.74
£143
150
2.31
2
100
1
50
0
0
Source: NITB
34
Average stay
Source: NITB
£97
Average spend per trip
With total tourism expenditure of £474mn in NI in 2013
Structure of tourism expenditure by GB & overseas visitors in NI
North America
13%
Other areas
14%
Britain
58%
Mainland Europe
15%
Source: Tourism Ireland
35
GB the clear leader in visitor arrivals growth since 2000
Contribution to overseas visitor arrivals growth by origin, 2000-13
Nordics
Canada
Netherlands
-3%
+335 visitors
2000-13
-2%
0%
Italy
1%
US
5%
Australia
5%
France
5%
Germany
5%
Spain
6%
Other areas
10%
Other Europe
16%
Britain
-10%
52%
0%
Source: Tourism Ireland
36
10%
20%
30%
40%
Net contribution to total visitor arrivals growth from overseas
50%
60%
NI tourism outlook and key challenges
37
Arrivals exceed peak with continued expected growth…
Northern Ireland visitor arrivals from GB and overseas (000s)
2,200
Forecast
2,100
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
Source: Tourism Ireland
38
Return to peak by 2015
+369mn
visitors from
2014 level
(+21.1%)
…despite challenge of euro depreciation…
Euro / GB pound exchange rate
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Source: Oxford Economics
39
Euro / £
…with moderate falls in market share…
Northern Ireland visitor arrivals share of Global outbound
0.25%
Forecast
0.20%
0.15%
0.10%
0.05%
0.00%
Source: Tourism Ireland
40
…travel from EZ markets is weaker…
Origin market share vs average annual growth, 2014-20
80%
Great Britain
70%
Origin market share 2014
60%
50%
40%
30%
20%
10%
0%
US
Other Europe
Nordics
Germany
0%
1%
Italy
2%
Spain
3%
AustraliaFrance
4%
5%
Canada
6%
Average annual growth in visitor arrivals, 2014-20
Source: Tourism Ireland
41
Netherlands
7%
8%
…but larger markets are the key driver of growth
Contribution to overseas visitor arrivals growth by origin, 2014-20
Nordics
0.1%
+369 visitors
2014-20
Germany
0.9%
Italy
0.9%
Other Europe
1.0%
Spain
1.4%
Netherlands
2.2%
Australia
3.6%
France
3.6%
Canada
4.5%
US
6.5%
Great Britain
70.9%
0%
10%
Source: Tourism Ireland
42
20%
30%
40%
50%
60%
Net contribution to total visitor arrivals growth from overseas
70%
80%
An additional £162mn in revenue expected by 2020
Revenues from GB and overseas (£m, current prices)
700
Forecast
600
500
400
300
200
100
0
Source: Tourism Ireland
43
+£162mn
from 2014
level
(+35.2%)
Expected arrivals growth to NI, below RoI average
Visitor arrivals growth, NI vs RoI (% per annum, 2014-20
15%
Forecast
NI
RoI
10%
2014/15 Seat Capacity, NI vs RoI
5%
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Great Britain
North America
Mainland Europe
Other Areas
Source: NITB, Tourism Ireland
-5%
-10%
-15%
-20%
Source: Tourism Ireland
44
NI
139024
2030
15593
-
RoI
276051
61892
302226
-
NI
relative
seat
capacity
50.4%
3.3%
5.2%
-
VAT reduction could be key to tourism industry
Overseas visitors and revenue in Republic of Ireland
Visitors (000s)
10000
■
VAT in Northern Ireland is
currently set at 20% relatively high we
compared to a European
average of 10.8% and the
Republic of Ireland at 9%.
Since the Republic of
Ireland reduced their VAT
rate on the hotel industry
to 9% in 2011, they have
seen a surge in visitor
numbers and revenue,
albeit with a lag period of
around 1 year.
■
The reduction in VAT is
forecast to lead to record
revenue and visitor
numbers in 2015 in the
Republic of Ireland – A
clear indication of the
power of tax cuts in the
tourism industry
Revenues (€mns)
6000
VAT cut
9000
5000
8000
7000
4000
6000
5000
3000
4000
2000
Overseas visitors
3000
Overseas tourism revenue
2000
1000
1000
0
0
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
45
2005
2004
2003
2002
2001
2000
Source: Tourism Economics
Key challenges to NI tourism
 Improving access – particularly air to gain market share from
long haul markets where visitors typically stay for longer and
spend more
 Policy support to the tourism industry via tax cuts (VAT &
APD)
 Building on recent successes and securing new events that
attract international visitors (e.g. World Police and Fire
Games, Derry-Londonderry City of Culture, Giro D’Italia,
Ryder Cup)
 External challenges will prevail in the form of weaker euro
46
Forecast gives cause for optimism and concern
2020 Tourism Strategy Targets vs expected performance
Visitors (000s)
Domestic NI
RoI
GB & Overseas
Total
2013
2020
Net change 201320
1,983
400
1,693
4,076
2,118
-
425
-
4,500
424
100.2%
-
622
-
149
-
1,000
277
53.6%
-
Revenue (£mn)
Domestic NI
192
RoI
57
GB & Overseas
474
Total
723
Source: DETI, NITB, Tourism Economics
47
Target
Growth
requirement
Contribution to
target
For more information:
Helen McDermott,
Lead Economist,
Tourism Economics, an Oxford Economics company,
+44 28 92 635 404,
[email protected]
48
Annex
49
…as lower oil price boost incomes…
50
…and pick-up in consumer confidence
Consumer confidence: US, UK and Eurozone
1985=100
160
% Balance
10
UK
(RHS)
5
0
Eurozone
(RHS)
120
-5
-10
-15
80
-20
-25
US
(LHS)
40
-30
-35
-40
0
2001
-45
2003
2005
Source: Haver Analytics
51
2007
2009
2011
2013
2015
Few sectors outperforming UK since recession…
NI sectoral employment growth relative to UK, 2010-14
Agriculture, forestry, etc
Construction
Transportation & storage
Professional services
Accommodation & FBS
Water supply
Financial & insurance
Mining & quarrying
Total
Wholesale & retail
Arts, entertainment, etc
Education
Admin & support
Health & social work
Information & comms
Other services
Real estate
Electricity, gas, etc
Manufacturing
Public admin
-5.9%
-4.9%
-4.8%
-4.1%
-3.6%
-3.2%
-2.7%
-1.8%
-1.8%
-1.0%
-0.8%
-0.8%
-0.7%
-0.7%
-0.4%
-0.2%
0.1%
0.4%
1.3%
1.4%
-7%
Source: Oxford Economics
52
-6%
-5%
-4%
-3%
-2%
-1%
0%
NI average annual growth - UK average annual growth
1%
2%
…growth sectors have smaller market share
NI sectoral employment growth relative to UK, 2014-19
Real estate
Professional services
Wholesale & retail
Total
Accommodation & FBS
Construction
Arts, entertainment, etc
Admin & support
Public admin
Financial & insurance
Education
Health & social work
Other services
Transportation & storage
Information & comms
Manufacturing
Mining & quarrying
Water supply
Electricity, gas, etc
Agriculture, forestry, etc
-0.9%
-0.7%
-0.6%
-0.6%
-0.5%
-0.5%
-0.3%
-0.2%
-0.2%
-0.2%
-0.2%
-0.1%
-0.1%
0.3%
0.4%
17.7%
share of
2014 jobs
0.4%
0.5%
0.8%
1.3%
-2%
Source: Oxford Economics
53
82.3%
share of
2014 jobs
-0.5%
-1%
-1%
0%
1%
NI average annual growth - UK average annual growth
1%
2%