Transcript Economic Outlook for the Global Hospitality Industry

THE NEW REALITY FOR
TRAVEL & TOURISM?
UFI IBRAHIM
CHIEF OPERATING OFFICER
WORLD TRAVEL & TOURISM COUNCIL
Rising per capita incomes are a key
driver of international tourism…
World: Overseas trips and per capita incomes
0.16
2000 US$ 000s
6.5
0.14
6.0
Number of trips
Real GDP per capita
5.5
0.12
0.10
0.08
Trips per heads
5.0
4.5
0.06
4.0
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Source: Oxford Economics
Air passenger declines waning
International air passenger traffic growth
% year, RPK
15
12
9
3mth mav
6
3
0
-3
-6
-9
RPK = revenue passenger kms
-12
Jan-05
Jan-06
Source: IATA
Jan-07
Jan-08
Jan-09
Total Demand
Personal T&T
Business Travel
Capital
Investment
Visitor Exports
-8
-6
-4
-2
0
Ten Year 2009 2008
2
4
6
World: Travel & Tourism Economy GDP growth
% year
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
Jan 2009
forecast
-2.0
-3.0
-4.0
1999
2001
2003
Source: Oxford Economics
2005
2007
2009
2011
2013
Intl Visitor Flows -Yr to date: UNWTO
World: -7.4%
Europe: -8.4%
Asia Pacific: -6.5%
Americas: -6.7%
Africa: +4.4%
Middle East: -13.4%
WHEN AND WHERE WILL RECOVERY
& GROWTH COME FROM IN
SHORT/MED TERM?
• IMF states France and Germany
already on path of recovery?
Returned to growth.
• Emerging economies are even
stronger. China and India.
While still below developed countries
in ten years’ time…
World: GDP per capita
US$ 2000 prices
at Purchasing Power Parities
50,000
US
Eurozone
45,000
Brazil
Russia
40,000
India
China
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1990
2000
Source : Oxford Economics/Haver Analytics
2009
2020
… Growth of BRICs’ per capita
incomes are catching up rapidly…
BRICs: GDP per capita
US$ 2000 prices
at Purchasing Power Parities
25,000
Brazil
Russia
India
China
20,000
15,000
10,000
5,000
0
1990
2000
Source : Oxford Economics/Haver Analytics
2009
2020
…resulting in surge in Chinese trips
abroad…
Chinese outbound tourism market
Tourist mn
125
100
US$ bn
125
Outbound Chinese
tourists (LHS)
Travel spend (RHS)
100
75
75
50
50
25
25
0
0
2000 2001 2002 2003 2004 2005 2006 2007
Source: Oxford Economics
2020
…with similar trends likely across the
other BRICs
BRICs: Residents' trips abroad
Millions
120
100
Brazil
Russia
India
80
China
60
40
20
0
2000
Source : Oxford Economics
2009
2020
Take note of India...
• 10.7 million outbound trips in 2008
annual growth of 12% per annum
since 1998
• 40% business, 20% VFR, 20%
leisure
• US$1.7bn spending in 1998;
US$9.6bn in 2008 – nearly six fold
increase
• Total trip volume doubled in 5
years
A world full of regulation...
• Tax, tax and more tax
• Environmental Legislation
local, national, regional or
international? Or all the above?
Value-trotters...
“globally aware,
environmentally-conscious,
technologically-savvy, timepoor individuals who are
spoiled by a wide range of
choice and consider
themselves good world
citizens.”
University of Maryland
Programme on
international policy
attitudes
World Public Opinion
Survey(2009):
19 nations
18,578 people
73% want higher priority for
climate change
77% Britons want greater
government intervention
44% of US Citizens want climate
change to be a major
preoccupation of the Obama
administration
Findings taken from Maryland University Programme on
International Policy Attitudes, World Public Opinion
Survey
In China - 94% supported the
need for government to keep
climate change on the front
burner.
And in India, 59% of the public
wanted their government to
make climate change a top
priority.
Findings taken from Maryland University Programme on
International Policy Attitudes, World Public Opinion
Survey
‘Take it for
granted?’
The Tipping Point
The International
Ecotourism Society states
that ecotourism is growing
at three times the rate of
traditional vacationing,
increasing annually up to
30%
Risk Free?
What could be the
impact of a real
H1N1 pandemic?
The swine flu epidemic so far
Affected: Americas,
esp. Mexico
Asia, fear of SARS
repeat and
government stern
response
Swine flu epidemic so far
Reported cases ('000s)
Reported deaths
400
4000
Deaths
(RHS)
350
300
250
3500
3000
2500
Cases
(LHS)
200
150
2000
1500
100
1000
50
500
0
28- 12- 26923Apr- May- May- Jun- Jun09
09
09
09
09
0
7Jul09
Source : WHO updates, last data 13 Sep
21Jul09
4181Aug- Aug- Sep09
09
09
Globally visitor exports fall 60%
vs base forecast (US$620bn)
The epidemic
also hits
domestic
tourism,
causing
losses to the
industry
beyond the
fall in foreign
visitors
“It is not the strongest of
the species that survives,
nor the most intelligent that
survives. It is the one that is
the most adaptable to
change”
Charles Darwin