European Tourism Q3/12 Trends&Prospects

EUROPEAN TOURISM in 2012:
TRENDS & PROSPECTS

Quarterly Report (Q3/2012)

A quarterly insights report produced for the Market Intelligence Group
of the European Travel Commission (ETC)
by Tourism Economics (an Oxford Economics Company)

Brussels, October 2012
ETC Market Intelligence Report

Copyright © 2012 European Travel Commission

European Tourism in 2012: Trends & Prospects (Q3/2012)

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The designations employed and the presentation of material in this publication do
not imply the expression of any opinions whatsoever on the part of the Executive
Unit of the European Travel Commission.

Data sources: This report includes data from the TourMIS database /
http://www.tourmis.info, STR Global, IATA, AEA and UNWTO.

Economic analysis and forecasts are provided by Tourism Economics and
are for interpretation by users according to their needs.

Published and printed by the European Travel Commission
Rue du Marché aux Herbes, 61, 1000 Brussels, Belgium
Website: www.etc-corporate.org
Email: info@etc-corporate.org

ISSN No: 2034-9297

This report was compiled and edited by:
Tourism Economics (an Oxford Economics Company)
on behalf of the ETC Market Intelligence Group

Photo © iStockphoto / Martin Wahlborg – Gothenburg city canal, Sweden

European Tourism: Trends & Prospects (Q3/2012) 1

Foreword

Despite ongoing economic troubles, including a fall back into recession for
Travel demand the Eurozone, tourism within Europe has continued to grow with increased
continues to grow arrivals from several key origin markets. However, the rate of growth has
throughout 2012 slowed in recent months.

Intra-regional demand has grown as European travellers seek cost
savings with shorter trips. And despite recent slowing, European
destinations are also attracting more visitors from key long-haul origin
markets.

With data now available for much of the peak summer season it is likely
that these trends are reflective of demand for the year as a whole.

European carriers report continued growth in air demand, with strongest
performance evident for flights within the continent. Longer-haul demand is
However,
exhibiting signs of slowing in response to a sputtering global economy.
performance has
slowed significantly Average occupancy rates of European hotels show a small decline for the
year to date and notably in Southern European destinations. Yet, there are
clear continued gains in some smaller Eastern European countries.

Hotels have been able to raise rates but these gains remain subdued,
especially in the face of other cost increases, and operators remain under
Cost savings are pressure. Data suggest a rise in demand for less expensive options
being sought in the including a shorter length of stay on tourism trips and a rise in non-hotel
uncertain economic
demand. While growth in arrivals continues, the contribution to revenue in
environment
the tourism industry remains under pressure.

The near term outlook faces continued headwinds and Tourism
Economics expects growth in European tourism to be both modest and
uneven in the coming year as the Eurozone fends off a financial crisis and
works toward policies that balance the objectives of fiscal order and
economic growth.

Nonetheless, the recent growth of both regional and long haul markets,
even in this challenging economic climate, portray the resilience of the
European travel industry once again. We trust you will find the analysis in
this report helpful as you track your own destination’s performance and
seek to anticipate future trends.

Best wishes,

Leslie Vella
Chairman
ETC Market Intelligence Group

© European Travel Commission, October 2012

2 European Tourism: Trends & Prospects (Q3/2012)

Executive Summary

 European travel proves resilient in the
face of the weak and uncertain global Foreign visits to select destinations
economic environment, with growth in 2012, year-to-date*, % change year ago
visits reported for most destinations 20
including from both long-haul and
European markets. 15

 However, growth has slowed as the year 10
has progressed indicated by air transport
and accommodation data as well as 5
available arrivals data. Passenger load
factors have reached a plateau while hotel 0

Iceland

Croatia
Lithuania

Slovenia

Montenegro
Germany
Romania

Netherlands

Slovakia
Estonia
Poland

Austria
Latvia
Serbia

Malta
Cyprus

Belgium

Ireland
Hungary
Czech Republic

Bulgaria

Italy
Spain

United Kingdom
occupancy for Europe as a whole has
fallen slightly. -5

 This is partly explained by cost-saving -10
behaviours to face the uncertain
economic environment, with an increase Source : TourMIS *date varies (Mar-Sep) by destination

in intra-regional as well as domestic
tourism demand. Hotel demand also
appears to be weaker than total tourism
demand indicating a rise in demand for European airlines passenger load factor
other forms of accommodation. weekly load factor, %
90
 Among European airlines, long-haul air
traffic demand has shown the greatest 85
2012
slowdown while intra-European demand
80
remains stout.
75
 The strongest growth in European tourism
demand is concentrated in smaller, 70
emerging Eastern destinations which tend
2011
to involve lower costs than some of the 65
more developed Western destination
60
markets. 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
 Prices, and therefore revenue and profits,
Source: AEA
remain under pressure. Hotel average
daily rates (ADR) in most markets are still
lower than pre-recession peaks,
especially once wider inflation is taken
Occupancy trends in Europe
into account.
% change year ago
2010 2011 2012 (Jan-Aug)
10
 The economic outlook remains uncertain
although the near-term risk of Eurozone 8
break-up appears to have faded. The
6
longer-run outlook remains uncertain and
risks of further, deeper recessions in the 4
future remain.
2
 TourMIS data on arrivals from key source
markets echo the trends seen in the 0

industry data. Intra-European travel is -2
benefitting from a shift away from more
expensive, long-haul travel. Japanese -4
Europe Eastern Northern Southern Western
arrivals continue to rebound following last Europe Europe Europe Europe
year’s natural and nuclear disasters in Source: STR Global
Japan.


European Tourism in 2012: Trends & Prospects (Q3/2012) 3

2012 Tourism Performance Summary
2012 European travel data indicate that international travel to the region has
continued to expand into the peak summer season but has slowed. Some of the
large established Western European destinations have posted growth in the first
eight months of 2012 although Central and Eastern European destinations
continue to lead the way. However, hotel performance data present a more
mixed picture of performance. Of the 27 reported countries, 17 are showing
declines in occupancy through August. This difference can partly be explained
by supply trends but may also be due to cost savings and a rise in non-hotel
accommodation, while average length of stay is also falling.

2012 Performance, Year to Date
Tourist Arrivals and Nights Hotel Performance, Jan-Aug
International Arrivals International Nights Hotel Occupancy Hotel ADR (LCU)
Country % ytd to month Country % ytd to month Country % ytd Country % ytd
Iceland 16.2 Aug Poland 12.8 Jun Iceland 18.7 Estonia 16.1
Poland 14.2 Jun Lithuania 11.2 Jun Russia 7.3 Italy 12.9
Spain 14.2 Aug Latvia 11.1 Jun Poland 6.6 Hungary 9.5
Romania 12.4 Jul Romania 9.7 Jul Slovakia 6.5 Romania 7.4
Lithuania 11.8 Jun Serbia 8.6 Aug Czech Republic 4.8 Ireland 6.6
Germany 7.7 Aug Germany 8.5 Aug Malta 3.3 Poland 6.6
Hungary 7.3 Aug Spain 8.5 Aug Estonia 2.5 Finland 6.0
Czech Republic 6.9 Jun Finland 7.8 Jul Germany 1.7 Netherlands 5.5
Latvia 6.4 Jun Hungary 7.3 Aug Ireland 1.6 Czech Republic 5.4
Serbia 6.1 Aug Croatia 6.3 Sep Hungary 0.0 Denmark 4.0
Slovenia 5.8 Jul Czech Rep. 6.0 Jun Austria -0.3 Turkey 3.9
Croatia 5.1 Sep Malta 5.9 Aug Turkey -0.3 France 3.6
Netherlands 4.9 Jun Slovenia 5.2 Jul Portugal -0.9 Portugal 3.0
Austria 4.6 Jul Austria 4.8 Jul Finland -1.0 Iceland 2.9
Montenegro 4.6 Aug Sweden 3.9 Aug Denmark -1.1 Germany 2.4
Cyprus 4.0 Aug Portugal 3.5 Jul Norway -1.3 Austria 1.5
Estonia 4.0 Aug Montenegro 3.4 Aug France -1.5 Russia 1.5
United Kingdom 3.0 May Netherlands 3.2 Jun Belgium -1.6 Spain 1.4
Slovakia 1.4 Mar Estonia 2.0 Aug Romania -2.3 Lithuania 1.4
Belgium 1.3 Jun Bulgaria 1.3 Jun Spain -2.3 Norway 1.3
Bulgaria 1.3 Aug Luxembourg 1.2 Aug Lithuania -2.4 Belgium 0.6
Malta 0.7 Aug Norway 1.2 Aug Italy -3.3 Switzerland -2.6
Italy -0.5 Jul Slovakia 0.3 Mar Netherlands -3.3 Malta -3.8
Ireland -1.4 Aug Belgium -0.1 Jun Switzerland -3.9 Greece -9.8
Cyprus -0.9 Jun Greece -5.2 Iceland -12.7
Switzerland -5.8 Aug Malta -8.9 Slovakia -18.8
Sources: TourMIS (tourist arrivals and nights including resident and inbound), STR Global (hotel occupancy and ADR)
Measures used for nights and arrivals vary by country
Based on data available through 18 October, 2012
ADR = average daily rate, LCU = local currency unit. Please refer to the glossary included at the end of the report for more details.

Foreign visits to select destinations Foreign visitor nights in select destinations
2012, year-to-date*, % change year ago 2012, year-to-date*, % change year ago
20 20

15 15

10 10

5 5

0 0
Switzerland
Luxembourg
Montenegro
Iceland

Croatia
Lithuania

Slovenia

Romania
Montenegro

Netherlands

Slovakia
Estonia
Romania

Germany

Austria
Latvia

Denmark
Netherlands

Slovakia

Malta
Estonia

Portugal

Norway
Poland

Austria

Finland

Cyprus
Latvia
Serbia

Malta

Hungary
Czech Republic

Bulgaria
Cyprus

Belgium

Ireland

Croatia
Hungary
Czech Republic

Lithuania

Spain
Bulgaria

Italy

Slovenia
Sweden
Spain

Germany
Poland

Serbia
United Kingdom

Belgium

-5 -5

-10 -10

Source : TourMIS *date varies (Mar-Sep) by destination Source : TourMIS *date varies (Mar-Sep) by destination

© European Travel Commission October 2012


Global Economy: Could growth surprise on the upside in 2013?

 The summer Eurozone financial market rally was
partly reversed in the second half of September.
Recent data show that the Eurozone is still in
recession, and there are few signs that the World: fiscal tightening
Discretionary fiscal tightening, % of GDP, 2012-2013
downturn is easing. Household purchasing power
Spain
is expected to fall for the third consecutive year
in 2012, hit by low nominal wage increases, falls Italy
in employment, cuts in government subsidies UK
and persistently high inflation. Oxford
Economics thinks that the recession that started Eurozone

in Q4 2011 will continue throughout 2012 and, France
for the year as a whole, forecasts a 0.6% fall in
US
GDP.
Germany
 At the September Federal Reserve Open
Market Committee (FOMC) meeting, the US Japan
Federal Reserve (Fed) announced a potentially 0 1 2 3 4
open-ended programme of asset purchases, Source : Oxford Economics/IMF
involving buying US$40 billion per month of
mortgage-backed securities.
 The Fed signalled a strong commitment to
boosting the recovery stressing that policy
would remain ‘highly accommodative’ even after
the recovery strengthens.
 Japan also relaxed policy last month and the UK
is likely to do so again later this year. And the
ECB’s looser stance since late 2011 has started
to improve monetary trends in the Eurozone. World: Advanced economies money growth
Against this background global stocks are up % annual growth in real broad money
20% on a year ago, and the question arises as l
12
to whether world economic growth could 10 Eurozone
surprise on the upside in 2013.
8
 However, the global economy still faces major 6
headwinds. Not least of these is the fiscal 4
tightening planned in the Eurozone and other Average of US, UK,
2
major economies through next year, which Eurozone & Japan
threatens to blunt the impact of loose monetary 0

policy. As it is, broad money supply growth in -2
the major economies – while improving – is still -4
only consistent with modest GDP growth. -6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
 On top of this, the soft patch in the emerging
Source : Oxford Economics/Haver Analytics
economies including China has continued into
Q3. The slowdown in Asia has also hit Japan,
which now risks dropping back into technical
recession in second half of 2012.
 Reflecting these headwinds, Oxford Economics’
forecasts for global real GDP growth in 2012
and 2013 are 3.0% and 3.3% respectively.
Given the continued downside risks from issues
such as the US ‘fiscal cliff’ and the Eurozone
financial crisis, it is quite likely that 2013 will see
policymakers once again having to increase
their efforts to strengthen the global recovery.



Recent Industry Performance
Slowdown but still growth in 2012
 Reflecting the sluggish global economic recovery, international air travel is
expanding at a reduced, but robust pace.

 Slower air travel demand means additional supply is sufficient to match
the additional capacity and load factors have reached a plateau.

 Although Eastern European hotel demand held up in the first eight months
of 2012, all other regions showed next to minimal growth prompting a
small contraction in European occupancy rates.

Air Transport
Global international air passenger traffic flows have International air passenger traffic growth
% year, RPK
slowed significantly in summer 2012 and are well
RPK = revenue passenger kms
below the +7% year-on-year advances recorded in 18
3 month
the February-April period. Air traffic, measued in 15 moving
12 average
Revenue passenger kilometers (RPK), reached 5.3%
9
in August following a sharp deceleration in July of just
6
3.5% growth.
3
Growth in 2012 to date has been driven by expansion 0

in Middle Eastern air traffic, including some rebound -3
-6 Icelandic Ash
from the slowdown in 2011 due to the Arab Spring. Cloud Impact
-9
The longer-run trend is consistent with rising travel
-12
demand from the region as well as increased market Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12
share for Middle eastern destinations. The slower Source: IATA

demand in July is likely due in part to the timing of
Ramadan.

The moderation in air passenger traffic flows reflects the heightened uncertainty
facing consumers worldwide. Air passenger travel appears to be moving in line
with the broader, sluggish economic environment.

International air passenger growth by region International air passenger growth by region
% year, RPK % year, RPK
2010
20 Jun-2012 20
2011
Jul-2012 2012
Aug-2012
asd
15 15

10 10

5 5

0
0
Africa Asia/Pacific Europe Latin Mid.East N.America World Africa Asia/Pacific Europe Latin Mid.East N.America World
Source: IATA America Source: IATA America



European passenger traffic growth remains robust in 2012, benefiting from
robust intra-European and domestic expansion. Revenue passenger kilometers
for European airlines have grown by 6.2% in the first eight months with some
slowdown evident as the year has progressed.

During the same period, European airline cross-border air traffic has weakened
somewhat, posting a 4.3% RPK advance. Europe-North America demand
remains lacklustre at 4.3%. Meanwhile, Europe-Far East air travel has been
even more subdued and only recorded a 3.3% increase. As was observed in
2008, European travellers have shifted away from long haul trips. As a
consequence, intra-European RPK has risen to well above its previous peak.

European airline passenger traffic European airline passenger traffic
RPK, 4 week moving average, % change year ago RPK, 4 week moving average, % change year ago
40 40 Total European
Europe-
Americas Airlines
30 30

20 20 Europe-
Total European Asia
Airlines
10 10

0 0

-10 -10
RPK = revenue passenger kms RPK = revenue passenger kms
-20 -20
2009w40

2010w1

2010w14

2010w27

2010w40

2011w1

2011w14

2011w27

2011w40

2012w1

2012w14

2012w27

2012w40

2009w40

2010w1

2010w14

2010w27

2010w40

2011w1

2011w14

2011w27

2011w40

2012w1

2012w14

2012w27

2012w40
Source: AEA Source: AEA

On average, load factors which had strengthened through 2011 and into 2012
have plateaued. There have been some marginal increases during 2012 to date
despite continued additions to capacity. Improvements may not have been as
high as some operators would have hoped for, but it is indicative of healthy
demand comparable to load factors experienced in the years prior to recession.

European airlines capacity European airlines passenger load factor
4 week moving average, Available Seat Km. (ASK), % change year weekly load factor, %
ago
35 90
30
25 2011 85
20 2012

15 80
10
75
5 2012
0
70
-5
-10 2011
2010 65
-15
-20 60
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Source: AEA Source: AEA



Accommodation

The global hotel industry continues to perform well in 2012. Recent STR Global
data indicate RevPAR (revenue per available room) expanded in the first eight
months of the year. The Americas region continues to stand out as experiencing
strong growth in all three indicators as compared to other regions. The region is
dominated by the US where hotel performance continues to exceed
expectations this year.

Global Hotel Performance, Jan-Aug 2012
% change year ago
9
Occ ADR* RevPAR*
8
7
6
5
4
3
2
1
0
-1
Asia/Pacific Americas Europe Middle
East/Africa
Source: STR Global * ADR and RevPAR denominated in US$ except for Europe

European hotels experienced a surprisingly strong advance of 5.5% in ADR,
despite a 0.2% contraction in the occupancy rate. Although hotels are facing
slowing demand, additional room supply factors into the declining occupancy
rate. During the same period, Asia Pacific recorded steady ADR advances
despite lacklustre performances in occupancy rates. Altogether this has resulted
in the slowest growth in terms of RevPAR among the regions.

Contrary to the experiences of Europe and Asia Pacific, the Middle East and
Africa region has recorded robust occupancy rate growth while room rates have
deteriorated. However, occupancy growth is largely an offset to large falls in
2011 due to the Arab Spring. Average room rates were not cut significantly in
response so there is limited scope to raise rates in 2012 while demand remains
below its long run trend in some markets.

European hotel performance, Jan-Aug 2012
% change year
12 Occ ADR (€) RevPAR (€)

10

8

6

4

2

0

-2

-4
Europe Europe Europe Europe
Source: STR Global



Within Europe hotels in Eastern European markets continue to outperform the
wider region with growth in both occupancy and ADR causing RevPAR to rise
9.3% in the first eight months of the year. Although, this growth does partly
reflect the relatively smaller initial base. By contrast, Northern European hotel
demand has been subdued in 2012 to date with almost zero growth in
occupancy through August while occupancy in Southern Europe fell 1.7%.

Occupancy trends in Europe
% change year ago
2010 2011 2012 (Jan-Aug)
10

8

6

4

2

0

-2

-4
Europe Europe Europe Europe

Source: STR Global

Overall European occupancy in 2012 to date has been slightly lower than in the
comparable period in 2011. As this period includes the peak summer season,
occupancy for the year as a whole is expected to fall. The weaker performance
in 2012 was expected to some extent as part of the slowdown from the rebound
in 2010 but the scale of slowdown has been greater than hoped.

Weakness is also evident in the country specific data which shows that 13 out
of 25 destination countries experienced a contraction in occupancy in the first
eight months of 2012. It is also instructive to consider the level of occupancy as
some of the falls have been in larger destinations with a typically high rate and
which carry a higher weight in regional aggregation. Some of the stronger
growth rates are in the lower occupancy destinations which have greater
potential for growth. Iceland experienced the strongest occupancy gains and
recorded an average occupancy of over 90% thus far in 2012.

Hotel occupancy rates Hotel occupancy rates
Jan-Aug YTD occupancy, % Jan-Aug YTD, % change year ago
100 2011 2012 14
90 12
10
80
8
70
6
60
4
50 2
40 0
30 -2

20 -4
-6
Italy
Malta

Israel

Austria

France

Greece
Spain

Turkey
Iceland

Ireland

UK

Russia
Portugal

Germany
Estonia

Denmark

Romania
Poland
Finland

Switzerland

Slovakia
Czech Rep.
Hungary

Belgium
Lithuania
Netherlands

Estonia

UK
Slovakia

Poland

Austria

Malta
France

Finland

Italy
Greece
Turkey
Iceland

Russia
Lithuania

Hungary
Germany
Ireland

Belgium

Spain

Portugal
Denmark
Netherlands

Romania

Switzerland
Czech Rep.

Source: STR Global Source: STR Global



ADR has grown in all European sub-regions in the year to date by 5.5%
allowing RevPAR in Europe to rise by 5.3%. Hoteliers continue to increase
prices in an attempt to bring rates back to their previous peaks, while ongoing
inflation continues to squeeze margins. ADR remains lower than previous peak
rates in most destinations, especially when adjusted for inflation, and increases
are not necessarily indicative of underlying demand or confidence by hoteliers.
Prices are also under pressure from consumers who appear to be seeking cost
savings.
Hotel revenue per available room (RevPAR)
Jan-Aug YTD, local currency, % change year ago
25
20
15
10
5
0
-5
-10
-15
Malta

France
Austria

Italy

Greece
Turkey
Iceland

Ireland
Russia

Germany

Spain

Portugal
Estonia

Romania
Denmark

UK

Switzerland
Poland

Czech Rep.

Finland

Slovakia
Hungary

Lithuania

Belgium
Netherlands

Source: STR Global

RevPAR fell in 7 out of 25 reporting destinations during the first eights months
of 2012. This is a more positive picture than looking at just occupancy, but there
is little change in some of Europe’s largest destinations. However several
Central & Eastern European destinations, including Poland, Estonia and
Hungary have posted above 10% increases in RevPAR.

Lodging Performance - Jan-Aug 2012
% change year ago Occ ADR RevPAR
Austria 0.3 2.0 2.3
Belgium -1.0 0.2 -0.7
Czech Republic 1.7 5.5 7.4
Denmark -0.7 5.5 4.7
Estonia 0.2 13.8 14.0
Finland -1.8 6.4 4.5
France -1.2 3.7 2.4
Germany 2.6 3.2 6.0
Greece -3.2 -5.6 -8.7
Hungary 3.5 8.2 12.0
Iceland 12.3 5.6 18.7
Ireland 2.1 8.5 10.8
Italy -2.8 1.3 -1.5
Lithuania 3.8 -3.6 0.1
Malta -1.0 5.1 4.1
Netherlands -0.9 0.4 -0.4
Poland 3.6 17.7 21.9
Portugal -2.1 -1.5 -3.6
Romania -1.7 6.9 5.1
Russia 6.6 2.5 9.3
Slovakia 9.4 -13.9 -5.8
Spain -1.9 3.1 1.1
Switzerland -2.4 -1.3 -3.8
Turkey 0.2 2.3 2.6
United Kingdom -2.0 4.2 2.1
Source: STR Global



Key Source Market Performance
A strong recovery in 2011 gives way to more uneven growth
 Outbound performance in 2012 to date has been uneven in most major
European source markets but with an overall downward trend. Russia
continues to be the star performer with growth in almost all destinations.

 While US arrivals to Emerging Europe continue to increase, the UK has
experienced a fall in demand from US travellers. Meanwhile, arrivals from
Japan continue to recover from 2011’s disasters.

 Travel from European origins is slower than in 2011, but destinations still
report growth, possibly at the expense of longer-haul destinations as cost
savings are sought.

Key intra-European markets
In the first eight months of 2012 travel from Germany expanded to most
destinations in Europe. In particular, German visits to Eastern European
destinations were robust. German travel growth to some large and more
expensive Western European destinations, including Switzerland, UK and
Belgium as well as some affordable locations slipped in the first eight months of
the year, possibly revealing that customers are reacting to heightened economic
uncertainty by cutting back on travel to more expensive locations.

Visits from Germany to select destinations German visitor nights in select destinations
25 25

20 20

15 15

10 10

5 5

0 0
Switzerland
Croatia
Lithuania

Slovenia

Luxembourg
Montenegro

Montenegro

Sweden
Romania

Romania
Netherlands

Netherlands
Slovakia

Slovakia
Estonia

Estonia
Austria

Poland
Austria
Latvia

Latvia

Serbia

Denmark
Malta

Malta
Portugal

Norway
Finland

Belgium
Cyprus

Cyprus
Hungary

Hungary
Czech Republic

Bulgaria

Bulgaria

Czech Republic
Croatia

Italy
Iceland
Lithuania

Spain

Spain
Slovenia

United Kingdom
Poland
Serbia

Belgium

-5 -5

-10 -10

-15 -15



A similar pattern emerged for the Dutch market, with the share of travel to
Eastern European destinations expanding as travel to some developed markets
remains subdued. Overall travel trends from the Netherlands for 2012 to date
suggest continued growth.

Visits from Netherlands to select destinations Netherlands nights in select destinations
40 40

30 30

20 20

10 10

0 0

Switzerland
Luxembourg
Montenegro
Montenegro

Romania

Slovakia
Romania

Estonia
Austria
Slovakia

Denmark
Estonia

Malta
Austria

Portugal

Norway
Malta

Finland

Cyprus
Cyprus

Hungary

Bulgaria

Czech Republic
Hungary

Croatia
Bulgaria

Czech Republic

Lithuania

Spain
Croatia

Italy
Iceland

Slovenia

Sweden
Lithuania
Spain
Slovenia

Germany
Germany

United Kingdom

Poland
Serbia
Poland
Serbia

Belgium
Belgium

-10 -10

-20 -20

-30 -30

The French outbound travel market also remains mixed in 2012. Of the 22
destinations reporting visits data, eight experienced declines in visits while a
further three destinations recorded anaemic growth (less than 1.5%). Nights
data supported this mixed picture, with nine out of the 26 reporting destinations
posting falls in the number of nights spent by French visitors in the first eight
months of 2012. Strong growth is overwhelmingly to emerging European
destinations but also with growth to some Western and Scandinavian
destinations.

Visits from France to select destinations French visitor nights in select destinations
25 25

20 20

15 15

10 10

5 5

0 0
Switzerland
Croatia

Lithuania
Montenegro

Slovenia
Sweden

Luxembourg
Romania

Germany
Slovakia

Netherlands
Montenegro

Estonia

Austria

Poland
Latvia
Serbia

Denmark

Malta
Romania

Portugal

Norway
Slovakia

Netherlands

Belgium
Finland

Cyprus
Estonia

Austria
Latvia

Bulgaria

Czech Republic
Hungary
Malta
Cyprus

Spain
Hungary
Bulgaria

Czech Republic
Iceland

Croatia

Italy
Lithuania

Spain

Slovenia
Germany

United Kingdom

Poland
Serbia

Belgium

-5 -5

-10 -10

-15 -15

-20 -20

-25 -25



The Italian outbound trend is generally weaker compared to other markets and
also shows mixed results. Of the reporting destinations, a third of the 18 show
the number of visitors fell during the first eight months of 2012. Meanwhile, 11
of the 26 reporting destinations recorded declines in the number of nights spent
by Italian visitors.

Visits from Italy to select destinations Italian visitor nights in select destinations
60 60

78 >
96 >

50 50

40 40

30 30

20 20

10 10

0 0

Switzerland
Croatia
Lithuania

Montenegro

Slovenia

Sweden
Romania

Germany

Netherlands

Slovakia

Estonia
Austria
Serbia

Denmark

Poland
Latvia

Malta

Portugal

Norway
Montenegro

Cyprus

Belgium

Finland
Romania

Hungary

Czech Republic

Bulgaria
Netherlands

Slovakia

Estonia
Austria

Spain
Latvia

Malta
Cyprus

Hungary
Czech Republic

Bulgaria
Iceland

Croatia
Lithuania

Spain
Slovenia
Germany

United Kingdom
Poland
Serbia

Belgium

-10 -10

-20 -20

-30 -30


Following the solid advances recorded in the early part of 2012, the UK
outbound travel market appears to have tapered slightly with a third of the 18
reporting destinations posting declines in the number of UK visits. Western as
well as Eastern European destinations showed some weakness, but the main
growth destinations were mostly in Eastern Europe. Destinations in this region
are generally lower cost but also lower volume markets and not necessarily
indicative of a healthy UK outbound market. The growth trend for UK outbound
appears to have deteriorated somewhat, also consistent with recent data
released for UK departures to Europe and the world.

Visits from UK to select destinations British visitor nights in select destinations
40 40

30 30

20 20

10 10

0 0
Switzerland
Luxembourg

Montenegro
Montenegro

Romania

Netherlands

Slovakia

Estonia
Romania

Austria
Netherlands

Denmark

Latvia
Slovakia

Malta
Estonia

Norway
Austria

Portugal
Latvia

Finland

Cyprus
Malta

Hungary
Ireland

Cyprus

Bulgaria

Czech Republic
Croatia
Czech Republic

Hungary

Bulgaria

Lithuania

Spain
Italy

Sweden

Slovenia
Iceland

Croatia
Lithuania

Spain

Slovenia

Germany
Germany

Poland

Serbia
Poland

Serbia

Belgium
Belgium

-10 -10

-20 -20

-30 -30



Russia has kept its position as the top performing source market. 18 out of 22
destinations recorded visitor growth from Russia which exceeded 10%.
Established destinations as well as emerging destinations throughout Europe
continue to benefit from this robust growth in Russian travel demand.

Visits from Russia to select destinations Russian visitor nights in select destinations
60 60
87 >

50 50

40 40

30 30

. 20 20

10 10

0 0

Montenegro
Romania
Slovakia

Netherlands
Estonia

Austria
Latvia

Malta
Cyprus

Hungary
Bulgaria
Czech Republic
Italy

Switzerland
Iceland

Croatia

Croatia
Lithuania

Spain

Lithuania
Slovenia

Slovenia

Sweden

Luxembourg
Montenegro
Germany

Germany
United Kingdom

Romania
Slovakia

Netherlands
Poland

Estonia
Poland
Serbia

Austria
Latvia

Denmark

Serbia
Malta

Portugal

Norway
Belgium

Cyprus

Finland
Belgium
Hungary

Czech Republic

Bulgaria
Spain
-10 -10




Non-European markets
Most destinations in Europe experienced a rise in American visitors. In
particular, Eastern European destinations, including Slovakia, Estonia, Croatia,
Serbia and the Czech Republic have recorded strong growth surpassing 15%
and 9 destinations reported double-digit growth in arrivals, although these are
lower volume markets. Given that the UK holds the most significant market
share, the modest climb (3%) in American visitors to the UK is still noteworthy
and the trend for US outbound, in general, shows growth.

Visits from US to select destinations US visitor nights in select destinations
40 40

30 30

20 20

10 10

0 0

Switzerland
Luxembourg

Montenegro
Romania
Slovakia

Netherlands
Estonia

Austria

Denmark

Latvia
Malta

Portugal

Norway
Cyprus

Finland
Hungary
Bulgaria

Czech Republic
Croatia

Lithuania

Spain
Slovenia

Sweden

Germany
Montenegro

Poland
Serbia
Romania
Slovakia

Netherlands
Estonia

Belgium
Austria
Latvia
Malta

Cyprus
Czech Republic

Hungary
Bulgaria
Iceland
Croatia

Italy
Lithuania

Spain
Slovenia
Germany

United Kingdom
Poland
Serbia

Belgium

-10 -10

-20 -20

-30 -30

The effects of the catastrophic earthquake, tsunami, and nuclear disaster in
early 2011 continues to characterise Japan travel data as growth to almost all
destinations are benefiting from strong growth as demand is rebounding.

Visits from Japan to select destinations Japanese visitor nights in select destinations
60 60
270 >

73 >

50 50

40 40

30 30

20 20

10 10

0 0
Iceland

Croatia
Lithuania

Montenegro
Slovenia

Germany

Romania
Netherlands

Slovakia
Estonia
Austria

Poland
Serbia

Switzerland
Cyprus

Belgium

Luxembourg
Montenegro
Czech Republic

Hungary
Bulgaria

Italy

Romania
Netherlands
Spain

Estonia
Austria

Denmark
Norway
United Kingdom

Cyprus

Finland
Hungary

Czech Republic

Bulgaria
Croatia
Lithuania

Spain
Slovenia

Sweden
Germany

Poland
Serbia

Belgium

-10 -10

-20 -20




Origin Market Share Analysis
Based on the Tourism Decision Metrics (TDM) model, the following charts
and analysis show Europe’s evolving market position - both in absolute and
percentage terms - for selected source markets.

United States
 82.0 million tourists traveled from the US in
US long haul* outbound travel Rest of Long Haul

2011. Of these, 32.5 million traveled within Million Central/Eastern Europe

60 Southern Europe
North America, while 49.4 million (60.3%) Western Europe

traveled to long haul destinations. 50 Northern Europe

40
 US tourist arrivals to Europe in 2011 totaled
30
21.1 million, representing 42.8% of the US long
haul outbound market. 20

10
 US tourist arrivals to Northern Europe in 2011
0
totaled 4.9 million, representing 23.2% of US
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
arrivals to Europe. *Long haul defined as tourist arrivals to destinations outside North America
Source: Tourism Economics
 US tourist arrivals to Western Europe in 2011
arrivals to Europe.

 US tourist arrivals to Southern Europe in 2011
arrivals to Europe.

 US tourist arrivals to Central/Eastern Europe in
2011 totaled 2.7 million, representing 12.9% of
US arrivals to Europe.

 Northern Europe's share of the US market was
9.9% in 2011, a 4.0 percentage point decrease
from 2001.

 Western Europe's share of the US market was
16.3% in 2011, a 5.9 percentage point decrease
from 2001.

 Southern Europe's share of the US market was
11.0% in 2011, a 1.6 percentage point increase
from 2001.

 Central/Eastern Europe's share of the US
market was 5.5% in 2011, a 0.2 percentage
point increase from 2001.

 Long haul outbound from the US is forecast to
grow 5.3% per year on average through 2016.

 Arrivals to Northern Europe are expected to
increase 28.9% through 2016, to 6.3 million.
Northern Europe's share of the US market is
forecast to fall to 9.9% in 2016.



 Arrivals to Western Europe are expected to Europe's share of US market Northern Europe
% of long haul* market Western Europe
increase 26.2% through 2016, to 10.2 million. Southern Europe
25%
Western Europe's share of the US market is Central/Eastern Europe

forecast to fall to 15.9% in 2016. 20%

 Arrivals to Southern Europe are expected to 15%
increase 15.2% through 2016, to 6.3 million.
10%
Southern Europe's share of the US market is
forecast to fall to 9.8% in 2016. 5%

 Arrivals to Central/Eastern Europe are expected 0%

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
to increase 35.2% through 2016, to 3.7 million.
*Long haul defined as tourist arrivals to destinations outside North America
Central/Eastern Europe's share of the US Source: Tourism Economics
market is forecast to rise to 5.8% in 2016.

Note: this analysis is based on the Tourism Decision Metrics (TDM) model. The geographies of Europe are defined as:

Northern Europe: Denmark, Finland, Iceland, Ireland, Norway, Sweden, UK

Western Europe: Austria, Belgium, France, Germany, Luxembourg, Netherlands, Switzerland

Southern/Mediterranean Europe: Albania, Bosnia-Herzogovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy, Malta,
Montenegro, Portugal, Serbia, Slovenia, Spain, Turkey

Central/Eastern Europe: Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan, Latvia,
Lithuania, Poland, Romania, Russian Federation, Slovakia, Ukraine


European Tourism Q3/12 Trends&Prospects

European Tourism Q3/12 Trends&Prospects

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