European Travel Commission - Trends & Prospects | Q1 2015

European Tourism in 2014:
Trends & Prospects
Quarterly Report (Q2/2014)
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2 European Tourism in 2015: Trends & Prospects (Q1/2015)
© European Travel Commission, May 2015
EUROPEAN TOURISM in 2015:
TRENDS & PROSPECTS
Quarterly Report (Q1/2015)
A quarterly insights report produced for the Market Intelligence Group
of the European Travel Commission (ETC)
by Tourism Economics (an Oxford Economics Company)
Brussels, May 2015
ETC Market Intelligence Report

European Tourism in 2015: Trends & Prospects (Q1/2015) 3
Copyright © 2015 European Travel Commission
European Tourism in 2015: Trends & Prospects (Q1/2015)
All rights reserved. The contents of this report may be quoted, provided the source
is given accurately and clearly. Distribution or reproduction in full is permitted for
own or internal use only. While we encourage distribution via publicly accessible
websites, this should be done via a link to ETC's corporate website, www.etc-
corporate.org, referring visitors to the Research/Trends Watch section.
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@visiteurope.com
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
Cover: The riverside, Gdansk, Poland
Copyright: Shutterstock / Nightman1965
In memoriam Mr Tom Ylkänen

Foreword
European tourism on cruising speed in 2015
 The World Tourism Organization (UNWTO) expects
world tourism to grow on average between 3.0% and
4.0% in 2015 after a 4.7% increase in 2014. Growth in
European tourism is forecast to remain apace with the
world average (3.0% to 4.0%), and well above the
region’s long-term average
1
.
 Early results for the first months mark a positive start into
2015. The majority of destinations reported positive
growth in both international arrivals and overnights
2
. This
positive performance is backed-up by solid results from
industry performance indicators. Air passenger traffic,
accounted for an average 5.0% increase in RPK
3
over
the past four months. Falling fuel prices are further
expected to spur growth if lower costs are passed on to
passengers.
Intra-regional markets keep driving region’s growth
 As the economic outlook slowly improves, positive effects
on travel can be expected in 2015. The region’s growth
will be supported by the weighty intra-regional markets,
triggered by a weaker euro and slowly stabilizing
economies supporting travel domestically and within
Europe.
 According to the European Commission’s Eurobarometer
survey
4
, 8 in 10 European citizens will go on holiday in
2015. 45.0% of respondents will do so without changing
their plans. However, those affected by the economic
situation are more likely to change their travel patterns:
one in five respondents (19.0%) intends to spend less,
others will change the length of their holiday (7.0%),
travel at a different time of the year (7.0%) or even
change their holiday destination (4.0%).
 Economic indicators suggest a strong performance from
Europe’s biggest economies: Germany, the United
Kingdom and France. The top performing outbound
market – Germany – keeps growing economically due to
a weak euro exchange rate spurring exports, low oil
prices and stable wages. UK’s key macro indicators
reveal a strong bump up resulting from falling oil prices
and shrinking unemployment levels. On a wider level,
most destinations posted positive results from these
markets, with strong growth owed to good weather
conditions that fostered demand for winter breaks in ski
resorts, especially from French and German tourists.
1
UNWTO (2015), World Tourism Barometer, Vol. 13, January 2015
2
Regularly updated data can be obtained from TourMIS (www.tourmis.info).
3
RPK: Revenue Passenger Kilometres
4
European Commission (2015), Preferences of Europeans Towards Tourism, Flash Barometer 414
International tourist arrivals - Europe
Source: World Tourism Organization (UNWTO) *forecast
-6
-4
-2
0
2
4
6
8
07/06 08/07 09/08 10/09 11/10 12/11 13/12 14/13 15/14*
% change Long-term average
Preferences of Europeans towards tourism, 2015
% of total respondents
Source: European Commission, Flash Eurobarometer 2015
0
10
20
30
40
50
60
70
80
90
100
EU-28 DE UK FR NL IT
Going on holiday Not changing travel plans
Spending less Changing length of stay
-5
0
5
10
15
20
Africa Asia/Pacific Europe Latin
America
Mid.East N.America World
Nov-14 Dec-14 Jan-15 Feb-15
% year
Source: IATA
Monthly international air passenger growthMonthly international air passenger growth
% change, year ago

Forward momentum expected from largest long-haul market
5
 In 2015, long-haul markets remain an important driver of growth in terms of
international tourist arrivals to European destinations. In particular, the US market
whose ongoing economic recovery makes Europe an attractive destination for
tourists in terms of exchange rate, safety and security, the borderless Schengen
area and the wide variety of the region’s cultural offer. As the US dollar heads
towards parity with the euro and results in macro-economic indicators show signs
of recovery, outbound trips from the US to Europe are expected to increase by
6.0% in 2015.
 Russia still remains a major source market for European destinations, however,
due to the recent economically turbulent period, the majority of reporting ETC
destinations saw international arrivals and overnights plummet dramatically over
the first months in 2015. The Russian Federation’s economy is projected to plunge
again in 2015 strongly affected by GDP contraction, a higher inflation from a
weakened Rouble, lower oil prices and the on-going political conflict. Considering
all these factors, the tourism performance for this market will be substantially
affected. According to the OECD’s most recent forecast5
for 2015 GDP is set to
record a decline of 4.6%.
 The picture from other source markets is mixed. In Asia, the deceleration of the
Chinese economy did not halt continued appetite for outbound travel from the
country, while in Japan fears of weakening travel demand due to contracted
spending power remain. Likewise, tax cuts and squeezed spending paint a much
bleaker picture for Brazil than a year ago.
Jointly working towards the future of European tourism
 European tourism experienced a consistent stable growth driven by key events and
the implementation of successful marketing activities by destinations.
Nevertheless, Europe’s position as the world’s number one tourist destination is
not incontestable. Half of all international arrivals to Europe are generated by only
a few markets – mainly intra-regional – with modest growth rates. In an ever-
changing global environment and to leverage the potential of emerging source
markets overseas, European destinations are increasingly seeking beneficial
public-private partnerships and cross-border cooperation in order to remain
competitive.
 “Europe is a marvellous destination to promote to your clients. As ETC, we work
together with key industry representatives who share with us a common goal in
promoting Europe. We want to be the primary partner of all relevant public and
private tourism bodies when it comes to promote travel to Europe”, says Mr Peter
De Wilde, President of the European Travel Commission.
Jennifer Iduh & Stefanie Gallob (ETC Executive Unit)
with the contribution of the ETC Market Intelligence Group
5
Outbound travel forecasts from US, Canada, China and Brazil are available on the ETC Executive Dashboard:
http://etc-dashboard.org/dashboard/market?3. The service is available to ETC members only.
5
European Parliament Research Service, The Russian Economy
http://www.europarl.europa.eu/RegData/etudes/IDAN/2015/551320/EPRS_IDA%282015%29551320_EN.pdf

-10
-5
0
5
10
15
20
Montenegro
Croatia
Serbia
Portugal
Hungary
Slovenia
Norway
Denmark
Sweden
Austria
Poland
Germany
Malta
Spain
Luxembourg
Switzerland
Slovakia
Estonia
Finland
Foreign visitor nights in select destinations
2015, year-to-date*, % change year ago
Source: TourMIS *date varies (Jan-Mar) by destination
-20.8
24.835.4
-10.3
-11.1
-10
-5
0
5
10
15
20
Iceland
Montenegro
Croatia
Romania
Hungary
Slovenia
Austria
Serbia
Malta
Cyprus
Germany
Turkey
Bulgaria
Spain
Poland
Switzerland
Slovakia
Estonia
Finland
Foreign visits to select destinations
31.4
-11.4
24.627.4
-21.9
2015 Tourism Performance Summary
The majority of reporting countries appear to have had a good start to 2015 in terms of
both visits and overnights. This will have been helped by a weaker euro which is
benefitting price attractiveness for Eurozone destinations. Tourism Economics
estimates that the dollar’s recent appreciation will result in European inbound arrivals
being 1.1% higher in 2015 than they would have otherwise been had the dollar
retained its 2014 value. This demonstrates the significance of the dollar appreciation
in offsetting weakness from Russian outbound travel, as Europe would not be the
affordable destination it is now.
This significance is obvious according to reported data. However, it should be noted
that these year-to-date trends are only for the initial months of the year which is the
low season for many destinations. As such, growth rates shown in this section are not
indicative of expected full year performance, but show some emerging trends.
2015’s portfolio of top performers to date is similar to that of 2014, with Iceland in
particular managing to sustain, for the third consecutive year, growth in foreign visits in
excess of 30% based on the first three months of 2015 compared to the same period
in 2014. Montenegro has been growing steadily over the past number of years, with
last year one of the slowest of these, but has enjoyed somewhat of a resurgence this
year to date, seeing 23.2% growth in foreign visits, and 22.4% growth in overnights,
based on data to February. Notably, Montenegro was one of only two reporting
destinations which saw growth from Russia, the other being Romania.
Only Slovakia and Estonia saw foreign visits fall in the first few months of 2015
compared to the same months in 2014, by 3.6% and 11.4% respectively. These same
two along with Finland also posted falling overnights, by 10.3%, 11.1%, and 20.8%
respectively.
Russia’s economic decline has been pivotal to the poor performance of Slovakia over
the past number of months, as a source market representing a relatively large
proportion of total arrivals to Slovakia. But complete withdrawal from Slovakia by
EasyJet, one of Europe’s largest low cost carriers (LCC), and the partial withdrawal of
Ryanair, a similarly large European LCC, has only exacerbated the decline in arrivals.
Estonia and Finland’s recent demise highlight the vulnerability of being overly reliant
on any one source market, but since these countries tend to be popular winter
destinations for the Russian tourist, arrivals will likely rebound as these come into
season for the rest of Europe.

Despite uncertainty surrounding Greece’s status within the EU, and concerns that
some large European source markets, such as Germany, might stay away, data from
SETE Intelligence shows that foreign visits continued to grow (by 25.6%) in the first
two months of the year compared to the same period in 2014. Furthermore, hotels
data for Greece on the whole and for Athens in particular add credence to the
argument that confidence in the Greek economy is not yet completely destroyed. We
will continue to monitor Greek performance closely in coming months.
Croatia enjoyed 25% growth in both foreign visits and overnights, which compares
favourably to the fall that was observed during the same period last year compared to
2013, but also demonstrates how susceptible the country’s tourism flows are to the
timing of holiday periods, with a later than usual Easter the reason behind last year’s
fall.
Suggestions in previous editions that an over-reliance on Russian visitors might
hamper Serbia’s growth prospects in the coming years appear to have been
overstated as it posted a strong start to the year, enjoying both foreign visits and
overnights growth in excess of 10% for the first two months of 2015 compared to the
same period in 2014. This bolsters Serbia’s position amongst the many emerging
tourism destinations within Europe, having seen some strong growth in both visits and
nights over the past number of years.
Austria and Switzerland, two of Europe’s most popular ski destinations, both
welcomed a greater number of foreign visitors in the first two months of the year
compared to the same two months in 2014. Arrivals to Austria grew particularly
strongly by 11.2%, as did overnight visits by 7.3%. Other mature destinations, such as
Germany and Spain continued to grow into 2015 by 5.9% and 4.5% respectively.
Country % ytd to month % ytd to month
Austria 11.4 Jan-Feb 7.5 Jan-Feb
Bulgaria 5.0 Jan-Feb
Croatia 24.6 Jan-Mar 24.8 Jan-Mar
Cyprus 7.7 Jan-Feb
Denmark 8.3 Jan-Feb
Estonia -11.4 Jan-Feb -11.1 Jan-Feb
Finland -21.9 Jan-Jan -20.8 Jan-Jan
Germany 5.9 Jan-Feb 6.2 Jan-Feb
Hungary 12.1 Jan-Feb 9.4 Jan-Feb
Iceland 31.4 Jan-Mar
Luxembourg 0.7 Jan-Feb
Malta 10.4 Jan-Feb 6.0 Jan-Feb
Montenegro 27.4 Jan-Feb 35.4 Jan-Feb
Norway 8.9 Jan-Jan
Poland 4.2 Jan-Feb 7.1 Jan-Feb
Portugal 11.2 Jan-Jan
Romania 13.1 Jan-Feb
Serbia 11.0 Jan-Feb 17.2 Jan-Feb
Slovakia -3.6 Jan-Jan -10.3 Jan-Jan
Slovenia 11.7 Jan-Feb 9.0 Jan-Feb
Spain 4.5 Jan-Feb 1.4 Jan-Feb
Sweden 7.8 Jan-Feb
Switzerland 2.4 Jan-Feb 0.7 Jan-Feb
Turkey 5.4 Jan-Feb
Source: TourMIS, http://www.tourmis.info; available data as of 27.4.15
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values.
Tourist Arrivals and Nights
2015 Performance, Year to Date
International Arrivals International Nights
7
7
7
7
7
7
2
2
2
3
2
2
2
2
2
2

2014 Tourism Performance Summary
With full year data for 2014 for the majority of reporting countries, it is clear to see that
2014 was another solid year for European tourism.
The country with the fastest growing number of foreign arrivals was Iceland, which
saw the numbers of visitors it received increase by 24.1%. Greece followed closely
with 23% growth in the number of visitors it received in 2014 compared to the year
before.
Other notable growers were some of the emerging European markets in the form of
Latvia, Serbia, Romania, and Czech Republic, all of which saw double digit growth in
the number of visitors they received, by 14.5%, 11.6%, 11%, and 10.9% respectively.
But more mature, western European markets continue to thrive, demonstrating
demand for destinations spanning the entire width of the continent; Spain and the UK
both saw the numbers of visitors they received in 2014 grow by7.1% and 7%
respectively compared to 2013.
Slovakia and Finland appear to have been the only losers amongst ETC’s members.
Both have reported large falls in the number of visits from Russia, a large and
important source market for each of them.
Country % ytd to month % ytd to month
Austria 1.9 Jan-Dec -0.7 Jan-Dec
Bulgaria 2.4 Jan-Dec
Croatia 5.3 Jan-Dec 2.2 Jan-Dec
Cyprus 1.5 Jan-Dec -2.9 Jan-Sep
Czech Rep 10.9 Jan-Dec 6.8 Jan-Dec
Denmark 7.7 Jan-Dec
Estonia 2.2 Jan-Dec 0.3 Jan-Dec
Finland -2.6 Jan-Dec -2.8 Jan-Dec
Germany 4.6 Jan-Dec 5.0 Jan-Dec
Greece 23.0 Jan-Dec
Hungary 4.6 Jan-Dec 2.7 Jan-Dec
Iceland 24.1 Jan-Dec
Italy 1.2 Jan-Dec 0.5 Jan-Dec
Latvia 14.5 Jan-Dec 9.0 Jan-Dec
Lithuania 6.2 Jan-Dec 3.8 Jan-Dec
Luxembourg 2.7 Jan-Dec
Malta 6.8 Jan-Dec 4.9 Jan-Dec
Montenegro 1.9 Jan-Dec
Norway 7.1 Jan-Dec
Poland 4.3 Jan-Dec 4.2 Jan-Dec
Portugal 9.9 Jan-Dec
Romania 11.0 Jan-Nov
Serbia 11.6 Jan-Dec 8.7 Jan-Dec
Slovakia -11.7 Jan-Dec -10.0 Jan-Dec
Slovenia 6.1 Jan-Dec 1.4 Jan-Dec
Spain 7.1 Jan-Dec 4.6 Jan-Dec
Sweden 8.0 Jan-Dec
Switzerland 2.1 Jan-Dec 0.9 Jan-Dec
Turkey 5.5 Jan-Dec
UK 7.0 Jan-Nov
Source: TourMIS, http://www.tourmis.info; available data as of 15.4.15
Measures used for nights and arrivals vary by country
See TourMIS for further data including absolute values.
Tourist Arrivals and Nights
2014 Performance, Year to Date
International Arrivals International Nights

Global Tourism Forecast Summary
Tourism Economics’ global travel forecasts are shown on an inbound and outbound
basis in the following table. These are the results of the Tourism Decision
Metrics (TDM) model, which is updated in detail three times per year. Forecasts are
consistent with Oxford Economics’ macroeconomic outlook according to estimated
relationships between tourism and the wider economy. Full origin-destination
country detail is available online to subscribers.
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
data/estimate/forecast *** d d e f f d d e f f
World 5.1% 5.0% 3.3% 4.7% 4.7% 4.8% 5.2% 3.3% 5.0% 5.1%
Americas 3.3% 7.5% 4.2% 4.7% 4.5% 3.0% 3.6% 4.6% 5.1% 4.7%
North America 3.9% 8.2% 4.2% 4.5% 4.4% 2.2% 2.8% 5.6% 5.4% 4.7%
Caribbean 2.2% 6.1% 3.3% 4.6% 4.3% -1.8% 5.0% 2.4% 5.1% 7.0%
Central & South America 2.4% 6.2% 4.6% 5.6% 4.8% 6.6% 5.8% 1.8% 3.9% 4.4%
Europe 6.0% 3.9% 1.0% 3.3% 3.8% 4.0% 3.8% 0.6% 3.4% 4.1%
ETC+3 5.7% 5.0% 2.1% 3.4% 3.6% 1.9% 4.7% 2.6% 3.9% 3.7%
EU 5.3% 4.5% 2.0% 3.5% 3.3% 1.6% 4.6% 2.8% 4.0% 3.7%
Non-EU 8.7% 2.0% -2.7% 2.8% 6.0% 11.1% 1.5% -5.6% 1.6% 5.4%
Northern 4.2% 6.6% 3.2% 3.8% 3.9% 3.1% 5.4% 2.5% 4.3% 3.6%
Western 5.2% 2.1% 1.3% 2.4% 2.3% 1.2% 4.7% 3.4% 3.8% 3.5%
Southern/Mediterranean 6.5% 8.0% 2.4% 3.7% 4.5% -0.2% 5.7% 1.2% 2.6% 2.9%
Central/Eastern 7.0% -0.7% -2.9% 3.7% 4.8% 9.5% 1.0% -4.2% 3.0% 6.0%
- Central & Baltic 5.8% 2.9% 2.2% 4.8% 3.8% 5.3% 2.6% 2.0% 5.0% 5.2%
Asia & the Pacific 6.1% 5.7% 5.9% 6.7% 6.2% 7.2% 6.3% 5.8% 6.7% 6.3%
North East 3.5% 7.3% 6.9% 6.8% 6.5% 7.5% 6.8% 5.7% 6.6% 6.2%
South East 10.2% 3.0% 4.5% 6.7% 5.6% 7.9% 2.5% 5.5% 6.8% 6.4%
South 6.7% 9.0% 7.9% 6.7% 7.6% 2.7% 15.9% 9.9% 8.1% 7.8%
Oceania 4.1% 6.3% 3.9% 5.3% 5.3% 5.3% 5.0% 2.7% 5.9% 4.5%
Africa -0.9% 4.7% 5.8% 5.1% 4.2% 2.0% 5.2% 5.7% 5.1% 4.7%
Mid East 4.0% 5.4% 6.4% 5.9% 6.7% 5.3% 12.8% 4.7% 5.8% 5.7%
* Inbound is based on the sum of the country overnight tourist arrivals and includes intra-regional flows
** Outbound is based on the sum of visits to all destinations
Note: world inbound and outbound do not match exactly in historic data or forecast. This is due to visits to multiple destinations.
For example, one outbound trip may be to more than one destination. Some sample error may also be evident in historic data.
*** d - data reported by national statistical agencies are available for all years to 2014
e - 2015 estimated using all available year-to-date data, and forecasts for the rest of the year
f - forecasts according to Tourism Economics' global economic and tourism forecast models
ETC+3 = ETC members plus France, Netherlands, and UK
EU = Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Germany, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sw eden, UK
Non-EU Europe is all European countries (listed below ) outside EU
Northern Europe = Denmark, Finland, Iceland, Ireland, Norw ay, Sw eden, UK
Western Europe = Austria, Belgium, France, Germany, Luxembourg, Netherlands, Sw itzerland
Southern/Mediterranean Europe = Albania, Bosnia-Herzegovina, Croatia, Cyprus, FYR Macedonia, Greece, Italy, Malta,
Central/Eastern Europe = Armenia, Azerbaijan, Bulgaria, Czech Republic, Estonia, Hungary, Kazakhstan, Kyrgyzstan, Latvia,
Lithuania, Poland, Romania, Russian Federation, Slovakia, Ukraine
of w hich
Central Europe & Baltic countries = Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia
TDM Visitor Growth Forecasts, % change
Outbound**Inbound*

Recent Industry Performance
Air Transport
Vigorous RPK growth as seen in 2014
shows no sign of abating based on the first
few months of data for 2015, with World
growth around 6%.
Only Africa saw lower levels based on the
same period in 2014 with RPK down by
1.3%. This appears to reflect adverse
economic developments in the region, not
least in Nigeria, one of its largest
economies, which is highly dependent on oil
revenues.
The Middle East continues to be the fastest
growing region in terms of RPKs, however,
growth this year has so far been slower than
previous full year growth rates.
Asia Pacific grew strongly in the first two
months of 2015 compared to the same
period in 2014, largely driven by February’s
growth which is due to the Lunar New Year
occurring one month later in 2015. The
Lunar New Year tends to give a boost to
holiday- related leisure travel.
Despite relatively weak economic conditions,
European airlines RPK growth has remained
steadfast with growth over the past four
months averaging 5%. Further growth
should be helped by the recent falls in oil
prices if lower costs are passed on to
passengers. Lower oil prices will also
continue to help support disposable income
and more general economic activity and
travel demand in 2015.
Strong industry growth a sign of things to come?
 RPK growth continues on an upward trajectory
 Last-minute cancellations of planned strike action means only minor disruption
was caused by industry protestors
 A strong dollar helps boost travel growth between Europe and the Americas
which continues to outpace total European air passenger traffic growth
 European hotel performance is broadly positive across all measures.
-12
-9
-6
-3
0
3
6
9
12
15
18
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total
3mth mav
Source: IATA
Icelandic Ash
Cloud Impact
International air passenger traffic growth
% year, Revenue Passenger Kilometers
-5
0
5
10
15
America
2013 2014 2015 ytd
% year, RPK
Source: IATA
Annual international air passenger growth
-5
0
5
10
15
20
America
Nov-14 Dec-14 Jan-15 Feb-15
% year
Source: IATA
Monthly international air passenger growth

Data from the Association of European Airlines (AEA) shows lower European airline
capacity for much of the beginning of 2015 compared to 2014. This is despite growing
demand off the back of falling oil prices, suggesting that airlines are reluctant to
increase their capacity in line with demand in order to keep prices high. Strike action
lasting 48 hours taken by French air traffic controllers in relation to changes to the age
of retirement caused some disruption, with a small contraction in airline capacity
observed at the beginning of Q2. Passenger load factor (PLF) appear to be following a
broadly similar pattern as in 2013 and 2014, with the exception of the strike disruption.
Travel between Europe and Asia increased at a faster rate than total European airline
passenger growth throughout most of 2014, but slowed as the year progressed and
into 2015 in line with slowing Chinese consumer spending. Nonetheless, Asian
economies and their propensity to travel long haul in line with economic trends in the
region is likely to pick up and the slower pace of growth observed in recent month is
not expected to last.
On the whole, air passenger traffic between Europe and the Americas continued to
grow at a faster rate than total scheduled travel to and from Europe in 2015 to date.
United States outbound travel to Europe will be particularly strong, driven by the
appreciation of the dollar against most key currencies, and notably against the euro,
as well as by favourable economic conditions in the United States. Recent analysis by
Tourism Economics estimates that the dollar’s recent appreciation will result in
European inbound arrivals being 1.1% higher in 2015 than they would have otherwise
been had the dollar retained its 2014 value. This highlights the significance of air
passenger flows between these two regions.
-5
0
5
10
Q1 Q2 Q3 Q4
2013 2014 2015
ASK, 4 week moving average, % change year ago
Source: AEA
European airlines capacity
60
65
70
75
80
85
90
Q1 Q2 Q3 Q4
2013 2014 2015
Weekly load factor, %
Source: AEA
European airlines passenger load factor
-4
-2
0
2
4
6
8
10
12
14
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
Americas Total
RPK, 4 week moving average, % change year ago
RPK = revenue passenger kmsSource: AEA
European airline passenger traffic: Americas
-4
-2
0
2
4
6
8
10
12
14
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
Asia Total
RPK, 4 week moving average, % change year ago
RPK = revenue passenger kmsSource: AEA
European airline passenger traffic: Asia

Accommodation
So far in 2015, all regions have seen occupancy rates grow or remain flat compared to
the same period in 2014. Based on data to March, Europe saw the greatest increase
in occupancy, which grew by 3.1% compared to the same period in 2014. Occupancy
in the Americas and Middle East/Africa grew by 2.8% and 1.3% respectively, while in
Asia Pacific, occupancy rates fell marginally by 0.1%. In Asia Pacific average daily
rate (ADR) and revenue per available room (RevPAR) both fell substantially in US$
terms by 5.8% and 5.9% respectively, reflecting the dollar’s recent gains on foreign
currency markets. Conversely, however, these same measures increased in euro
terms in line with its depreciation which has made it relatively more expensive for
Eurozone travellers to go beyond their borders.
In the Americas substantial jumps in ADR and RevPAR compared to the same period
last year were observed. Hotels reported respective increases of 3.9% and 6.8% in
dollar terms (in euro terms growth was 28.1% and 31.7% respectively). More
specifically, growth in North America suggests it is the driving force in the region, with
ADR and RevPAR 4.0% and 7.1% greater than the same period in 2014. Thus,
despite the strong dollar, travellers have not necessarily been deterred from visiting
North America. Nor, it seems, have domestic travellers been tempted by the additional
spending power the dollar now holds elsewhere.
Asia/Pacific Americas Europe Middle
East/Africa
-15
-10
-5
0
5
10
15
20 Occ ADR* RevPAR*
Global Hotel Performance, Jan-Mar 2015
% change year ago
Source: STR Global * ADR and RevPAR denominated in US$ except for Europe

Key Source Market Performance
Trends discussed in this section relate to the first three months of the year, although actual
coverage varies by destination; for the majority of countries January or February will be the
latest available data point.
Further detailed monthly data for origin and destination, including absolute values, can be
obtained from TourMIS, http://tourmis.info.
Key intra-European markets
Having been the fastest growing European destination for the past number of years,
Iceland owes at least some thanks to Germany from which it saw a 45.4% increase in
the number of visitors arriving in the first three months of 2015. Malta, Cyprus, and
Croatia have also seen vast increases in the number of German visitors they received;
Malta enjoyed growth of 43%, Cyprus growth of 30%, and Croatia 28%.
Estonia also saw German visits grow by 19% and nights by 14.7%. Despite this,
however, growth from Germany was not enough to offset falls from Russia, which as
an immediate neighbour, is one of Estonia’s largest source markets.
German interest in Austria has been restored after flat growth in arrivals and falling
visitor nights were observed during the same period last year. This year visits to
Austria from Germany grew by 13% and overnights by 9.1%. This restoration of
interest in its neighbour may be in part from necessity as the relative weakness of the
euro will have made trips to non-Eurozone countries less viable than they were this
time last year.
The contrast between Austria and Switzerland, as key winter destinations, is stark with
large cost differences due to the exchange rate movement. The weaker krone has
enticed Eurozone visitors to Denmark, including Germans, from which it received
15.7% more overnight visitors than in the same period in 2014.
A bright start to 2015…
 European travel demand continues to grow across the majority of markets
 Falling oil prices and a weaker euro have mostly had a positive impact, with only
a few losers
 Russian economy begins to show marginal signs of improvement, with exports
helping to stabilise the falling rouble, but this has yet to boost outbound tourism
 A strong US and Canadian dollar, and a weaker euro have boosted long-haul
travel demand
-20
-15
-10
-5
0
5
10
15
20
Iceland
Malta
Cyprus
Croatia
Estonia
Finland
Poland
Austria
Turkey
Slovenia
Bulgaria
Spain
Montenegro
Serbia
Hungary
Romania
Slovakia
Switzerland
Visits from Germany to select destinations
28304345.4
-20
-15
-10
-5
0
5
10
15
20
Malta
Croatia
Montenegro
Portugal
Serbia
Denmark
Estonia
Finland
Poland
Austria
Sweden
Slovenia
Luxembourg
Norway
Switzerland
Hungary
Spain
Slovakia
German visitor nights in select destinations
20.644.2

Estonia has also seen a large increase in the number of visits and overnights from
Netherlands, but once again, this is not enough to offset falls from Russia. Other
emerging European destinations such as Slovenia, Iceland, and Croatia also feature
on the list of countries reporting growth from the Netherlands. Slovenia posted visitor
growth of 13.9% and overnights growth of 30.3%, and Iceland and Croatia posted
visitor growth of 9.3% and 5.5% respectively.
While Malta and Montenegro featured top of Germany’s list of go-to destinations, their
preferences seemingly do not align with those of the Dutch tourist; their interest in
both diminished somewhat compared to the same period last year, by 12.7% and
9.9% respectively in terms of visits, and 4.6% and 31.5% respectively in terms of
overnights.
No less than five countries saw visits from France grow in excess of 20% compared to
the same period in 2014, and no less than six saw overnights from France grow in
excess of 20%. Chief recipients of this growth were largely emerging destinations
such as Montenegro, Iceland, Croatia, and Estonia, but the French continue to show
interest in some of Europe’s more mature destinations such as Austria, Malta, and
Portugal.
Slovenia, after enjoying substantial growth from France this time last year, now finds
itself at the bottom of the table with visits having fallen by 15.3% and overnights by
15.4%. But with substantial growth coming to Slovenia from elsewhere, this should
hardly be a huge concern. This also highlights the importance of a diverse portfolio in
terms of source markets. Denmark is also experiencing lower French demand and
euro weakness is the likely paving the way for Austria to gain some winter market
share from Switzerland.
-20
-15
-10
-5
0
5
10
15
20
Cyprus
Estonia
Austria
Slovenia
Germany
Poland
Iceland
Croatia
Switzerland
Turkey
Romania
Hungary
Slovakia
Spain
Finland
Bulgaria
Serbia
Montenegro
Malta
Visits from Netherlands to select destinations
46.3136.9
-20
-15
-10
-5
0
5
10
15
20
Estonia
Slovenia
Norway
Austria
Germany
Sweden
Hungary
Poland
Serbia
Denmark
Portugal
Luxembourg
Switzerland
Finland
Croatia
Spain
Slovakia
Malta
Montenegro
Netherlands nights in select destinations
-31.5
86.4 28.5
30.3
-20
-15
-10
-5
0
5
10
15
20
Montenegro
Cyprus
Iceland
Malta
Finland
Croatia
Estonia
Austria
Hungary
Serbia
Bulgaria
Poland
Romania
Germany
Spain
Slovakia
Switzerland
Turkey
Slovenia
Visits from France to select destinations
131.5
97.2
45.1 21.7
43.6 20.3
-20
-15
-10
-5
0
5
10
15
20
Malta
Croatia
Serbia
Portugal
Norway
Estonia
Hungary
Poland
Sweden
Austria
Finland
Germany
Montenegro
Switzerland
Spain
Luxembourg
Slovakia
Denmark
Slovenia
French visitor nights in select destinations
24.8
25.6
27.8
36.5
61.3
24.4

Malta has seen growth in Italian visitors according to data for the first two months of
2015. Having seen arrivals from Italy fall during the first few months of 2014 compared
to 2013, we can surmise that the late Easter holiday period in 2014 was at least partly
to blame. Visits growth of 28.8% and overnights growth of 65.4% based on data to
February compared to the same period in 2014 have likely been augmented by the
weaker euro ruling out more expensive, non-Eurozone destinations; Switzerland, for
example, has seen both arrivals and overnights from Italy fall. By contrast, Spain and
Portugal have seen arrivals from Italy boom, albeit based on a low sample in these
low season trends. But, as mature markets within Europe, this demonstrates their
resilience and enduring appeal, with both countries in possession of a diverse range of
assets.
The relative strength of sterling against the euro (albeit having experienced less of an
appreciation the dollar) has made the Eurozone all the more appealing for the British
visitor. No countries reported falling visits from the UK while only a minority have
reported falls in the number of received overnights.
Montenegro and Hungary proved to be the go-to destinations of the British visitor in
the first months of 2015, visits from the UK growing by 92.1% and 44.4% respectively,
and overnights by 120.9% and 49.2% respectively. Iceland continues to be a popular
draw for British visitors, seeing arrivals growth of 30.7% in the first three months of
2015 compared to the same period in 2014.
Slovakia received a much needed boost from the UK, with an increase in the number
of visits and overnights at least going some way to offset the losses suffered at the
hands of instability within Russia, one of its largest source markets, and all the knock-
on impacts this has had on outbound tourism from Russia.
-20
-15
-10
-5
0
5
10
15
20
Iceland
Estonia
Malta
Poland
Spain
Slovenia
Finland
Austria
Romania
Hungary
Slovakia
Germany
Bulgaria
Croatia
Turkey
Switzerland
Serbia
Montenegro
Cyprus
Visits from Italy to select destinations
49.3
-39.1
20.4
38
28.8
27.4
-20
-15
-10
-5
0
5
10
15
20
Malta
Portugal
Estonia
Poland
Spain
Finland
Slovenia
Norway
Austria
Hungary
Germany
Slovakia
Croatia
Serbia
Montenegro
Sweden
Switzerland
Denmark
Luxembourg
Italian visitor nights in select destinations
65.4
44.9
29.342.7
37.5
-30
-20
-10
0
10
20
30
Montenegro
Hungary
Croatia
Slovakia
Norway
Estonia
Denmark
Poland
Sweden
Finland
Germany
Portugal
Slovenia
Austria
Spain
Malta
Switzerland
Luxembourg
Serbia
British visitor nights in select destinations
120.9
49.2
-30
-20
-10
0
10
20
30
Montenegro
Hungary
Iceland
Croatia
Slovakia
Romania
Estonia
Slovenia
Austria
Poland
Germany
Turkey
Malta
Bulgaria
Spain
Serbia
Finland
Cyprus
Switzerland
Visits from UK to select destinations
92.1 44.4 30.7

Latest trends point to more large falls in Russia travel demand compared to the same
period last year. All but two reporting destinations have recorded falling arrivals and all
but one has recorded falling overnights from Russia, including some traditional
Russian holiday hotspots such as Turkey, and Estonia. However, because the Russia-
Ukraine crisis began in mid-March 2014, we are currently comparing post-crisis data
with pre-crisis data, and these falls should become less substantial once we can
compare post-crisis data with post-crisis data.
This reflects the impact of falling oil prices on Russian aggregate income and
uncertainty which caused the rouble to depreciate markedly over the better part of a
year, making foreign travel relatively more expensive for the Russian traveller. But
since January, the rouble has seen something of a rebound. It has been deemed one
of the best performing currencies of 2015 so far, albeit from a weak starting position.
With oil prices no longer falling, although at a very low level, the economy has
apparently stabilised. However, current economic and tourism demand remains well
below levels experienced in early 2014 and all indicators still point to a deep recession
in Russia this year. An eventual recovery in tourism demand is possible towards the
end of the year, but from a very low base.
Montenegro was one of only two reporting destinations which saw visits from Russia
grow by 30.1% and overnights by 40.8% in the first two months of 2015 compared to
the same period in 2014.
Greece’s invigorated relationship with Russia may yield some benefits in 2015 as the
new government begins to forge alliances beyond the EU by virtue of its lax imposition
of Western-led sanctions, perhaps preparing for the worst in terms of its future as an
EU member state.
-50
-40
-30
-20
-10
0
10
20
30
40
Montenegro
Romania
Cyprus
Croatia
Serbia
Slovenia
Spain
Turkey
Switzerland
Hungary
Germany
Austria
Bulgaria
Iceland
Slovakia
Estonia
Poland
Finland
Visits from Russia to select destinations
-75
-55
-35
-15
5
25
45
Montenegro
Spain
Serbia
Croatia
Portugal
Luxembourg
Norway
Slovenia
Switzerland
Germany
Hungary
Sweden
Austria
Denmark
Finland
Estonia
Slovakia
Poland
Malta
Russian visitor nights in select destinations

Non-European markets
Latest data shows that travel to Europe from the US was positive in all but a few
reporting destinations. The US economy is strengthening according to the latest
economic data with an upswing in consumer spending through jobs and wage growth.
There remains scope for growth in outbound travel particularly in terms of long haul
travel, helped by further appreciation in the dollar against key currencies such as the
euro.
Montenegro and Croatia enjoyed particularly strong overnights growth from the US by
82.4% and 51.8%, based on data to February and March, respectively. Many other
European destinations, both emerging and mature, have seen arrivals from the US
grow as the stronger currency and favourable economic conditions make travel to
these destinations more viable than they would have been this time last year.
Conversely, a handful of destination have seen arrivals fall, most notably Malta and
Cyprus which received 21.9% and 53.4% less visits from the US respectively.
Some very strong growth in Croatia (73.8%) and Slovenia (57.0%), suggest an
appetite for the emerging European destination markets, yet Cyprus and Spain, both
more mature destinations, also received a greater number of Japanese visitors
compared to the same period in 2014, with respective growth of 94.1% and 29.2% in
visits.
Visits and overnights from Japan suggest that the export-led policies of the Bank of
Japan have not affected travel behaviour as much as initially feared, despite lower
spending power in international markets from the weaker yen. The number of
European countries that reported a growing number of arrivals versus falling arrivals
was evenly split, while a small majority (of one) reported falling overnight versus
growing overnights.
-20
-10
0
10
20
30
40
Romania
Iceland
Hungary
Serbia
Montenegro
Spain
Slovakia
Croatia
Poland
Turkey
Austria
Bulgaria
Estonia
Finland
Germany
Switzerland
Slovenia
Malta
Cyprus
Visits from US to select destinations
-53.4-21.9 -20
-10
0
10
20
30
40
Montenegro
Croatia
Luxembourg
Serbia
Hungary
Poland
Spain
Portugal
Slovakia
Norway
Austria
Germany
Slovenia
Switzerland
Denmark
Estonia
Sweden
Finland
Malta
US visitor nights in select destinations
82.4
-24.5
51.8

Outbound travel from China has started off strong in 2015 in terms of both visits and
overnights, with double digit growth observed in the vast majority of destinations. We
should expect to see a continuation of growth in outbound travel, and ahead of
general GDP growth. This comes despite ongoing signs of slowdown in the economy
and industrial activity, although consumer surveys and retail sales data remain robust.
Travel to Europe as a whole was estimated to have grown by over 17% in 2014 as a
whole – the fifth consecutive year of growth. However, given the relatively small
volumes, travel from China to Europe should not be overvalued, accounting for just
1.5% of European arrivals in 2014.
Arrivals growth from India is positive with the majority of European destinations
reporting double digit figures, and in the case of Croatia and Montenegro, triple digit
growth in overnights from India of 205.4% and 161.2% respectively. At the same time
however, Montenegro reported a fall in the number of visits, and Croatia a much
smaller increase in the number of visits compared to overnights. This suggests that
perhaps Indian visitors are staying longer in one place rather than taking multiple-
destination trips. But with no more than three months’ data for 2015 at this stage, it is
too early to draw definitive conclusions and this trend should be monitored throughout
the year.
-30
-20
-10
0
10
20
30
40
Cyprus
Croatia
Slovenia
Spain
Estonia
Iceland
Poland
Austria
Romania
Germany
Hungary
Serbia
Switzerland
Turkey
Finland
Bulgaria
Slovakia
Montenegro
Visits from Japan to select destinations
94.1 73.8
-46.4
57
-30
-20
-10
0
10
20
30
40
Croatia
Slovenia
Luxembourg
Spain
Poland
Serbia
Slovakia
Estonia
Austria
Germany
Switzerland
Hungary
Norway
Portugal
Denmark
Finland
Sweden
Montenegro
Japanese visitor nights in select destinations
65
-51
58.7 46.9
49.4
-10
0
10
20
30
40
50
Cyprus
Serbia
Croatia
Spain
Iceland
Estonia
Slovakia
Slovenia
Turkey
Switzerland
Austria
Germany
Romania
Poland
Hungary
Bulgaria
Finland
Montenegro
Visits from China to select destinations
221.5
-46.1
109.7
101.6
80.7
55.2
56.1
75.8
-10
0
10
20
30
40
50
Serbia
Croatia
Estonia
Slovenia
Spain
Slovakia
Denmark
Switzerland
Austria
Germany
Norway
Poland
Sweden
Hungary
Finland
Luxembourg
Montenegro
Chinese visitor nights in select destinations
128.1
-61.3
94 57.2
58.1

Indian arrivals still represent a relatively small proportion of total European arrivals and
some volatility should be expected, but with limited impact on overall destination
performance. In the longer-term, growth prospects remain strong with potential
economic reform. Given these positive economic trends, there is clear potential for
India to catch-up with China as an emerging source market.
Some promising growth from Canada has been reported by the majority of reporting
destinations, many of which have seen visits and overnights from Canada grow by
double digit figures. Falling World oil prices caused the Canadian dollar to depreciate
against its US counterpart, making US holidays less appealing. But at the same time,
the Canadian dollar appreciated against the euro, making European destinations more
attractive.
Spain, Serbia, and Montenegro were all notable beneficiaries of these currency
movements, enjoying visitor growth of 52.9%, and 33.8%, and overnights growth of
59.5%, 84.6%, and 96.4% respectively. Other destinations also report strong, double-
digit growth rates, including some large developed markets, indicating the benefit of
the increased price attractiveness.
-30
-20
-10
0
10
20
30
40
50
Croatia
Bulgaria
Hungary
Austria
Switzerland
Germany
Spain
Turkey
Poland
Finland
Montenegro
Slovakia
Visits from India to select destinations
93.3
-30.5
-30
-20
-10
0
10
20
30
40
50
Croatia
Montenegro
Hungary
Denmark
Spain
Austria
Poland
Switzerland
Germany
Finland
Sweden
Slovakia
Indian visitor nights in select destinations
205.4 161.2 57.8
-30
-20
-10
0
10
20
30
Spain
Serbia
Montenegro
Turkey
Hungary
Iceland
Slovenia
Poland
Romania
Bulgaria
Germany
Croatia
Switzerland
Austria
Finland
Slovakia
Cyprus
Visits from Canada to select destinations
78.9 51.9 33.8
-50.7
-30
-20
-10
0
10
20
30
Montenegro
Serbia
Spain
Norway
Portugal
Croatia
Hungary
Poland
Slovenia
Germany
Slovakia
Switzerland
Austria
Finland
Denmark
Sweden
Canadian visitor nights in select destinations
96.4 84.6 59.5 34
-62.4

Origin Market Share Analysis
Based on the Tourism Decision Metrics (TDM) model, the following charts and
analysis show Europe’s evolving market position – in absolute and percentage terms –
for selected source markets. 2015 values are year-to-date estimates based on the
latest available data and are not final reported numbers.
United States
Methodology note:
Data in these charts and tables relate to reported arrivals
in all destinations as a comparable measure of outbound
travel for calculation of market share.
For example, US outbound figures featured in the
analysis is larger than reported departures in national
statistics as long-haul trips often involve travel to multiple
destinations; in 2014 US data reporting shows 11.9m
departures to Europe while the sum of European arrivals
from the US was 23.4m. Thus each US trip to Europe
involved a visit to two destinations on average.
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-
Herzegovina, 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
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
Total outbound travel (000s) 94,537 - 4.7% 25.6% - 24.4% -
of which:
Long haul (000s) 57,489 60.8% 5.6% 31.2% 63.5% 25.8% 60.1%
Short haul (000s) 37,048 39.2% 3.2% 17.0% 36.5% 22.4% 39.9%
Travel to Europe***
Europe (000s) 24,761 26.2% 5.1% 28.4% 26.8% 28.0% 25.5%
Northern Europe (000s) 5,759 6.1% 6.7% 38.1% 6.7% 27.7% 5.9%
Western Europe (000s) 9,300 9.8% 4.1% 22.0% 9.6% 23.8% 9.9%
Southern Europe (000s) 6,317 6.7% 4.7% 26.0% 6.7% 29.3% 6.4%
Central/Eastern Europe (000s) 3,386 3.6% 6.0% 33.7% 3.8% 38.6% 3.2%
US Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
* Levels are in 000s unless otherwise specified
*** Shares are expressed as a % of total outbound travel
** Shows cumulative change over the relevant time period indicated
0
10
20
30
40
50
60
70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US long haul* outbound travel Rest of Long Haul
Central/Eastern Europe
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside North America
Source: Tourism Economics
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of US market
Northern Europe
Western Europe
Southern Europe
% of long haul* market

Canada
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 11,625 30.6% 5.4% 30.3% 32.3% 11.6% 33.6%
Short haul (000s) 26,372 69.4% 3.8% 20.2% 67.7% 28.2% 66.4%
Travel to Europe***
Europe (000s) 4,345 11.4% 3.2% 16.8% 10.8% 9.4% 12.8%
Northern Europe (000s) 926 2.4% 7.4% 43.0% 2.8% 2.9% 2.9%
Western Europe (000s) 1,622 4.3% 1.4% 7.1% 3.7% 1.2% 5.2%
Central/Eastern Europe (000s) 206 0.5% 5.9% 33.3% 0.6% -19.8% 0.8%
Canada Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Canada long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Canadian market Northern Europe
Western Europe
Southern Europe

Mexico
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 2,410 13.2% 5.1% 28.4% 12.7% 45.6% 10.9%
Short haul (000s) 15,874 86.8% 6.1% 34.5% 87.3% 16.8% 89.1%
Travel to Europe***
Europe (000s) 1,277 7.0% 3.1% 16.7% 6.1% 50.0% 5.6%
Western Europe (000s) 604 3.3% 3.2% 16.9% 2.9% 42.5% 2.8%
Southern Europe (000s) 441 2.4% 1.8% 9.5% 2.0% 56.5% 1.8%
Central/Eastern Europe (000s) 120 0.7% 5.0% 27.7% 0.6% 57.0% 0.5%
Mexico Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mexico long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
5%
10%
15%
20%
25%
30%
35%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Mexican market
Northern Europe
Western Europe
Southern Europe

Argentina
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 2,257 29.5% 4.0% 21.6% 29.6% 34.7% 28.5%
Short haul (000s) 5,406 70.5% 3.8% 20.8% 70.4% 28.7% 71.5%
Travel to Europe***
Europe (000s) 806 10.5% 4.5% 24.6% 10.8% 36.5% 10.1%
Western Europe (000s) 45 0.6% 4.9% 26.9% 0.6% 40.1% 0.5%
Argentina Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0.0
0.5
1.0
1.5
2.0
2.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Argentina long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside South America
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Argentinean market
Northern Europe
Western Europe
Southern Europe

Brazil
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 7,377 72.6% 4.9% 27.3% 72.3% 65.2% 66.6%
Short haul (000s) 2,789 27.4% 5.2% 29.1% 27.7% 24.4% 33.4%
Travel to Europe***
Europe (000s) 3,585 35.3% 1.7% 8.6% 30.0% 52.0% 35.2%
Western Europe (000s) 1,731 17.0% 0.4% 2.0% 13.6% 60.6% 16.1%
Brazil Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
1
2
3
4
5
6
7
8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Brazil long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
5%
10%
15%
20%
25%
30%
35%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Brazilian market
Northern Europe
Western Europe
Southern Europe

India
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 12,558 94.3% 5.9% 32.9% 93.9% 33.5% 96.2%
Short haul (000s) 761 5.7% 7.2% 41.8% 6.1% 105.5% 3.8%
Travel to Europe***
Europe (000s) 1,957 14.7% 6.0% 33.8% 14.7% 35.6% 14.8%
Western Europe (000s) 711 5.3% 5.9% 32.9% 5.3% 43.5% 5.1%
India Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
India long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside South Asia
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Indian market
Northern Europe
Western Europe
Southern Europe
*Long haul defined as tourist arrivals to destinations outside South Asia

China
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Note Chinese outbound shown here is smaller than
reported departures in national statistics as the latter
includes same day visits to Hong Kong and Macau.
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 28,293 39.4% 6.2% 35.3% 41.7% 143.1% 33.0%
Short haul (000s) 43,433 60.6% 4.3% 23.2% 58.3% 83.9% 67.0%
Travel to Europe***
Europe (000s) 9,173 12.8% 6.5% 36.9% 13.7% 127.5% 11.4%
Western Europe (000s) 5,190 7.2% 5.9% 33.3% 7.5% 163.6% 5.6%
China Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
5
10
15
20
25
30
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
China long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside Northeast Asia
0%
5%
10%
15%
20%
25%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Chinese market
Northern Europe
Western Europe
Southern Europe

Japan
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 13,488 61.2% 3.6% 19.5% 60.0% 8.5% 57.7%
Short haul (000s) 8,534 38.8% 4.7% 26.1% 40.0% -6.6% 42.3%
Travel to Europe***
Europe (000s) 4,185 19.0% 2.5% 13.3% 17.6% 0.9% 19.2%
Northern Europe (000s) 427 1.9% 1.7% 8.9% 1.7% -5.7% 2.1%
Western Europe (000s) 2,023 9.2% 2.0% 10.2% 8.3% 4.3% 9.0%
2015 Growth (2015-20) Growth (2010-15)
Japan Market Share Summary
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Japan long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Japanese market
Northern Europe
Western Europe
Southern Europe

United Arab Emirates
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
Total outbound travel (000s) 2,917 - 4.8% 26.2% - -14.7% -
of which:
Long haul (000s) 1,295 44.4% 3.6% 19.3% 42.0% 15.8% 32.7%
Short haul (000s) 1,622 55.6% 5.7% 31.7% 58.0% -29.5% 67.3%
Travel to Europe***
Europe (000s) 749 25.7% 2.4% 12.3% 22.9% 18.8% 18.4%
Western Europe (000s) 289 9.9% 2.7% 14.5% 9.0% 23.9% 6.8%
United Arab Emirates Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0.0
0.5
1.0
1.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
UAE long haul* outbound travel Rest of Long Haul
Southern Europe
Western Europe
Northern Europe
Million
*Long haul defined as tourist arrivals to destinations outside the Middle East
0%
5%
10%
15%
20%
25%
30%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Emirati market
Northern Europe
Western Europe
Southern Europe
*Long haul defined as tourist arrivals to destinations outside the Middle East

Russia
Norway, Sweden, UK
Slovakia, Ukraine
Methodology note:
Level* Share
Annual
average
Cumulative
growth**
Share
2020
Cumulative
growth**
Share
2010
of which:
Long haul (000s) 8,102 22.7% 9.5% 57.3% 27.2% 28.9% 24.3%
Short haul (000s) 27,655 77.3% 4.3% 23.6% 72.8% 41.1% 75.7%
Travel to Europe***
Europe (000s) 27,655 77.3% 4.3% 23.6% 72.8% 41.1% 75.7%
Northern Europe (000s) 1,563 4.4% 3.8% 20.4% 4.0% 35.0% 4.5%
Western Europe (000s) 2,169 6.1% 3.3% 17.5% 5.4% 62.1% 5.2%
Russia Market Share Summary
2015 Growth (2015-20) Growth (2010-15)
0
5
10
15
20
25
30
35
40
45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Russia outbound travel Rest of World
Southern Europe
Western Europe
Northern Europe
Million
*Outbound travel defined as tourist arrivals to all destinations
0%
10%
20%
30%
40%
50%
60%
70%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Europe's share of Russian market
Northern Europe
Western Europe
Southern Europe
% of outbound* market
*Outbound market defined as tourist arrivals to all destinations

Economic outlook summary: key source markets
 Assessing recent tourism data and industry performance is a useful way of directly
monitoring the key trends for travel demand across Europe. This can be complemented
by looking at key trends and relationships in macroeconomic performance in Europe’s
key source markets which can provide further useful insight into likely tourism
developments throughout the year.
 The linkages between macro and tourism performance can be very informative. For
example, strong GDP or consumer spending growth is an indication of rising prosperity
with people more likely to avail of international travel. It is also an indication of rising
business activity and therefore stronger business travel. Movements in exchange rates
against the euro can be equally important as it can influence choice of destination.
 Eurozone GDP growth is forecast to grow in 2015 across all key markets, most notably
Germany as a result of low inflation and falling unemployment.
 The UK’s recovery is in full flow with strong growth across all key macro indicators
expected in 2015 and 2016, particularly GDP and consumer expenditure, up 2.8% and
3.0% on 2014, respectively, both of which can be linked to falling oil prices.
 Russian growth has slowed substantially in 2015 and Oxford Economics’ latest outlook is
recession with GDP expected to fall more than 5.6%. This is partly linked to the large
devaluation of the rouble which began last year and risks related to capital flight in
emerging markets, while a falling oil price will also affect government revenue and
spending. There has been some reprieve in recent months, however, with more
competitive exports helping to ease the pain currently being felt elsewhere in the
economy.
 Chinese growth has been downgraded slightly, but strong GDP and consumer
expenditure growth is still expected.
 Lower fuel prices, steadily reducing inflation and higher business and investor
confidence suggest that growth in India will accelerate in the coming months and strong
GDP and consumer expenditure growth will pave the way for outbound travel growth.
Indian GDP growth expectations now surpass those of China.
GDP
Consumer
expenditure
Unemploy-
ment **
Exchange
rate*** Inflation GDP
Consumer
expenditure
Unemploy-
ment **
Exchange
rate*** Inflation
UK 2.8% 3.0% -0.8% 12.6% 0.3% UK 2.8% 2.8% -0.2% 4.9% 1.8%
France 1.2% 1.5% 0.1% 0.0% 0.3% France 1.7% 1.7% -0.3% 0.0% 1.0%
Germany 2.4% 2.7% -0.1% 0.0% 0.4% Germany 2.1% 1.7% 0.0% 0.0% 1.9%
Netherlands 1.3% 0.6% -0.8% 0.0% 0.6% Netherlands 1.4% 0.8% -0.3% 0.0% 1.3%
Italy 0.3% 0.5% -0.1% 0.0% 0.1% Italy 1.0% 0.7% -0.2% 0.0% 0.8%
Russia -5.6% -8.2% 1.1% -20.3% 15.5% Russia 0.9% 1.0% 0.5% 9.4% 6.7%
US 2.7% 3.1% -0.8% 25.1% 0.1% US 2.8% 2.8% -0.3% 5.7% 2.3%
Canada 2.2% 2.4% -0.2% 12.2% 0.8% Canada 2.2% 2.4% -0.1% 10.5% 2.2%
Brazil -1.3% -0.4% 0.5% -5.2% 8.0% Brazil 0.7% 1.1% 0.5% -0.5% 5.7%
China 6.6% 7.1% 0.0% 21.8% 1.0% China 6.1% 7.0% 0.0% 4.5% 1.4%
Japan 0.8% 0.4% -0.1% -6.7% 0.3% Japan 1.8% 2.1% 0.1% 1.5% 0.6%
India 7.5% 7.1% 0.0% 21.2% 5.5% India 7.5% 7.0% -0.1% 2.4% 5.9%
* unless otherwise specified
** percentage point change
Note: Colour coding relates to each individual column and highlights the strongest performing countries shaded as dark green (e.g. China fastest growing GDP), and
weakest performaing countries as dark red (e.g. rising unemployment and falling GDP, consumer expenditure, and exchange rate in Russia).
Summary of economic outlook: 2015
% growth y-y*
Macroeconomic indicators
Summary of economic outlook: 2016
% growth y-y*
Macroeconomic indicators
*** exchange rates measured against the euro. A positive change indicates stronger local currency against the euro and therefore a positive impact on outbound
tourism demand. A negative change indicates weaker local currency against the euro and therefore a negative impact on outbound tourism demand.

Overview: Global upswing delayed
 This month sees our global GDP growth
forecast for 2015 revised down to 2.7%,
implying no improvement from 2014. At the
start of the year, we expected world growth for
2015 at 2.9%.
 A key factor behind the slippage in our global
forecast has been a softening of activity in the
US. The balance of economic surprises (actual
data versus expected) has deteriorated sharply
in recent months. As a result, we now expect
US growth at 2.7% this year, compared to
3.3% at the start of 2015.
 We are wary of reading too much into the most
recent data, as the US and other advanced
economies also went through ‘soft patches’ at
the starts of both 2013 and 2014, but
recovered. Also, the balance of economic
surprises for the G10 is only moderately
negative – and is strongly positive for the
Eurozone.
 One area of concern is sluggish US
consumption recently - despite lower oil prices.
But with labour market conditions favourable
and disposable income growing solidly, we
expect this to prove a blip. And the evidence
from advanced economies as a whole
suggests lower oil prices have boosted
consumers.
 There are nevertheless genuine drags on
global growth. The strong dollar appears to be
weighing on US exports and investment, and
curbing profits. It is also damaging growth in
some emerging markets through its negative
impact on commodity prices and capital flows
and via balance sheet effects (raising the
burden of dollar-denominated debt).
 Meanwhile, this month also sees a fresh
downgrade to our forecast for China – GDP is
now expected to rise 6.6% this year versus
6.8% a month ago. This reflects weakness in a
number of key indicators and also the likely
impact of a squeeze on local government
finances from the property sector slump.
 With the US and China representing a third of
global GDP, slower growth there will also tend
to retard world trade growth. We continue to
expect world GDP growth to reach 3% in 2016,
but 2015 now looks like being another year of
sub-par global growth.
-100
-80
-60
-40
-20
0
20
40
60
80
100
2012 2013 2014 2015
G10: Economic surprise indices
Index
Source : Oxford Economics/Citigroup/Haver Analytics
G10
US
-1.0
-0.5
0.0
0.5
1.0
1.5
1980 1983 1987 1990 1994 1998 2001 2005 2008 2012
World: Consumer spending and oil slumps
% quarter, two period average
Source : Oxford Economics/Haver Analytics
G4
Consumer
spending
Periods where
oil prices fell
50% or more
(peak to
trough)
F'cast

2013 2014 2015 2016 2017 2018
Real GDP
North America
United States 2.2 2.4 2.7 2.8 2.7 2.7
Canada 2.0 2.5 2.2 2.2 2.4 2.4
Europe
Eurozone -0.4 0.9 1.6 1.8 1.7 1.6
Germany 0.2 1.6 2.4 2.1 1.6 1.2
France 0.4 0.4 1.2 1.7 1.5 1.6
Italy -1.7 -0.4 0.3 1.0 1.1 1.0
UK 1.7 2.8 2.8 2.8 2.7 2.5
EU27 0.1 1.3 1.9 2.1 2.0 1.9
Asia
Japan 1.6 -0.1 0.8 1.8 0.8 0.6
China 7.7 7.4 6.6 6.1 5.7 5.5
India 6.4 7.2 7.5 7.5 7.0 6.8
G7 1.5 1.6 2.1 2.3 2.1 2.0
World 2.5 2.7 2.7 3.0 3.2 3.2
World 2010 PPPs 3.2 3.3 3.3 3.9 3.9 3.9
World trade 2.6 3.5 3.0 5.5 5.7 5.4
Inflation (CPI)
North America
United States 1.5 1.6 0.1 2.3 2.2 2.2
Canada 1.0 1.9 0.8 2.2 2.0 1.9
Europe
Eurozone 1.3 0.4 0.1 1.3 1.4 1.6
Germany 1.5 0.9 0.4 1.9 1.8 1.8
France 0.9 0.5 0.3 1.0 1.4 1.6
Italy 1.2 0.2 0.1 0.8 1.0 1.3
UK 2.6 1.5 0.3 1.8 1.9 1.9
EU27 1.5 0.6 0.2 1.5 1.6 1.7
Asia
Japan 0.4 2.7 0.3 0.6 2.0 1.3
Emerging Asia, excl Japan 5.0 5.3 5.2 4.7 4.4 4.3
China 2.6 2.0 1.0 1.4 2.1 2.6
India 10.7 6.6 5.5 5.9 5.8 5.6
World 3.6 3.2 1.9 2.8 2.7 2.4
Exchange Rates
US$ Effective 75.9 78.4 92.3 94.3 93.0 92.0
$/€ 1.33 1.33 1.06 1.00 1.00 1.02
¥/$ 97.6 105.9 123.4 132.2 136.1 137.9
Commodity Prices
Brent Oil ($/bl) 108.7 99.1 56.9 63.6 70.0 76.3
Summary of International Forecasts

Eurozone Economy
 Recent news from the Eurozone has continued
to be optimistic and is consistent with GDP
expanding in Q1 at the fastest pace since the
onset of the latest economic recovery.
 In March, the closely watched composite PMI
continued its recent upward trend, rising to its
highest level since 2011. Admittedly, on past
form, the latest reading is only consistent with
quarterly GDP growth of 0.3% or so, in line
with Q4’s outturn. But the available hard data
for Q1 have been pretty strong, suggesting
that there is a good chance that GDP growth
accelerated in the first quarter of the year.
 We expect household spending to be the key
driver of growth in Q1 and over the coming
quarters. Thanks to strong real wage growth
and rising employment, retail sales are on
track to expand at their fastest pace in over a
decade. And the rise in consumer sentiment in
March to its highest level since 2007 points to
further strength to come.
 Although the euro has drifted higher over the
past couple of weeks against the dollar, it has
weakened by about 10.0% since the start of
the year against the dollar and by around 8.0%
on a trade-weighted basis. For now at least,
export growth remains weak, but the recent
improvement in the EC measure of firms’
export orders perhaps provides tentative signs
that growth will gradually build over the year,
particularly if the euro falls to near parity in line
with our forecast.
 We expect such an improvement, combined
with solid domestic demand, to eventually
trigger stronger investment, particularly if this
is accompanied by a further loosening in credit
standards. Nonetheless, investment growth will
be steady rather than spectacular, especially
this year.
 In all, we still expect GDP to rise by an above
consensus 1.6% this year and 1.8% in 2016
with the pace of growth gradually easing
thereafter.
-4
-3
-2
-1
0
1
2
2000 2003 2006 2009 2012 2015
GDP % q/q
GDP Indicator
Source: Oxford Economics/Haver Analytics
Euro area GDP indicator
% q/q
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
1999 2001 2003 2005 2007 2009 2011 2013 2015
EC consumer confidence (LHS)
Households spending (RHS)
Eurozone Consumer spending & confidence
Index
Source : Oxford Economics/Haver Analytics/Markit
% q/q
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1997 2000 2003 2006 2009 2012 2015
% year
Source: Oxford Economics
F'cast
Eurozone: Consumer price inflation
Eurozone:

UK Economy
 Once again the national accounts data appear
to be stuck in a pattern where weak initial
readings are revised up over time. The latest
Quarterly National Accounts saw GDP growth
in Q4 2014 upgraded from 0.5% to 0.6%, with
2014 as a whole revised up from 2.6% to
2.8%. And this process looks set to be
repeated in Q1 2015. Weak monthly output
readings for January point to a low preliminary
estimate for Q1, but business surveys and
retail sales data have been much stronger,
suggesting that ultimately the data will be turn
out to be firmer once more.
 CPI inflation slowed to zero in February, the
lowest reading for 55 years. Although petrol
prices have started to edge upwards in recent
weeks, there remains a strong chance that we
will soon see a negative reading for inflation,
with the cuts to gas bills from four of the big six
energy providers still to hit the index and
disinflationary pressures continuing to feed
along the supply chain. However, the chances
of low inflation becoming entrenched still look
relatively slim. Base effects will drag inflation
back up again towards the end of 2015 and,
though subdued, there is no evidence that
underlying inflationary pressures are
weakening.
 The Chancellor presented the final Budget of
the parliament on 18 March. Mr Osborne
revisited regular themes with a further increase
in the tax fee personal allowance and more
help for savers, and these giveaways were
financed by additional revenues from banks
and tax avoiders. The macroeconomic impact
of the measures is likely to be negligible.
However, the Chancellor did make an
important change to the assumptions for
departmental spending. This has resulted in a
profile that the OBR has likened to a
“rollercoaster”, with sharp spending cuts in
2016-17 and 2017-18 followed by a substantial
rise in 2019-20. The Chancellor’s retort was
that a Conservative government would not
make the initial deep cuts as it would instead
achieve some of the necessary savings
through cutting spending on welfare. In any
case, the chances of government spending
actually following the path laid out in the OBR’s
forecasts is very low and, as such, we continue
to assume an alternative path as the basis for
our forecasts.
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Euro/£
US$/£
UK: Exchange rates
Forecast
96
97
98
99
100
101
102
103
104
105
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15
Manufacturing
Construction
Services
UK: Monthly output
Jan 2014 = 100
Source : Oxford Economics/Haver Analytics
Forecast
Horizontal lines denote quarterly averages
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Other
Energy
Petrol
Food
CPI
UK: Contributions to CPI inflation
% year
Source : Oxford Economics
Forecast

US Economy
 The economy appears to have slowed so far
this year, following on from 2.2% annualized
growth in Q4. Poor weather, still-cautious
consumers in the face of modest wage growth
and households pocketing a little of the savings
from lower gas prices have led to subdued
domestic demand data. In addition, a stronger
dollar and only moderate global growth have
dampened net exports. As a result, we expect
GDP growth of just 1.4% in Q1. That being
said, economic fundamentals remain solid.
Despite the modest payroll gains in March, the
12-month moving average remains a healthy
200,000 jobs per month, in line with our
expectations for 2015.
 Hourly and weekly earnings are now rising at a
2.1% year-on-year pace but are struggling to
make much headway, despite growing survey
evidence of rising wage pressures across the
country. However, we see stronger wage
growth materializing through 2015 and this,
combined with solid jobs growth, will support
consumer outlays. With low gasoline prices
providing an additional boost, real personal
consumption should rise 3.1% in 2015.
 Growth in the real estate sector remains
modest, but still-high affordability and rising
incomes should help generate a gradual
acceleration in housing activity.
 Net exports will be a drag on the economy in
2015 as a stronger currency and modest global
growth will weigh on US exports. However, as
global growth picks up, so will demand for US
exports, though firm domestic demand will
continue to pull in imports.
 The plunge in oil prices has led to a sharp
decline in the number of oil rigs and mining
employment, and reduced capex in the oil
sector will weigh on the economy in the coming
quarters. But the boost to consumer spending
should outweigh this drag.
 We foresee headline CPI inflation hovering
around zero (with possible negative readings)
through the summer, but then rebounding
towards 2.0% in the second half of the year.
With core inflation well anchored, we maintain
our call for a Fed rate hike in September.

Japanese Economy
 Business surveys have softened in early 2015.
The manufacturing PMI averaged 51.4 in Q1,
compared to 52.1 in Q4 2014, and the March
reading of 50.3 was the lowest for almost a
year. Similarly, the services PMI averaged 49.4
in Q1, down from 50.3 in Q4, and March’s 48.4
was also the weakest for about a year.
 Official data on the production side do not look
quite so gloomy. Industrial production remains
volatile, falling 3.4% on the month in February,
but the trend does appear to be upwards –
output in the three months to February was up
1.9% on the previous period. And the tertiary
industry activity index rose 1.4% on the month
in January, suggesting a fairly strong start to
the year, in contrast to the PMI surveys.
 On the expenditure side, private consumption
has weakened recently – retail sales were down
1.2% in the three months to February over the
preceding period. On the other hand, the big
expenditure drag in recent quarters has been
destocking, and this should now be easing as
inventory ratios return to more normal levels. In
addition, foreign trade still looks positive for
growth – real exports were up 3.3% in the three
months to February over the previous period,
while imports rose 2.8%.
 On balance, we estimate that GDP grew 0.4%
in Q1, equal to the rate seen in Q4 2014, and
down a little from the 0.6% we were expecting
last month. However, we remain relatively
optimistic on growth for the remainder of the
year, and have only nudged down our full-year
growth forecast for 2015 to 0.8% (from 0.9%
last month).
 The main concern is on inflation. Core inflation
(excluding the impact of last April’s sales tax
hike) fell to 0% in February and is highly likely
to have dropped into negative territory in March.
Recent Bank of Japan (BoJ) minutes do not hint
at any imminent policy easing. Rather, we think
the BoJ will have to see a string of negative
inflation outturns before moving again, so we
expect an addition to QE in October. The
marginal impact of extra QE on growth and
inflation will be fairly small, but should give an
additional lift to asset prices and push the yen
down further.
40
45
50
55
60
2012 2013 2014 2015
Manufacturing
Services
Source: Markit
Japan: Purchasing managers' indices
Balance = 50
90
95
100
105
110
115
2002 2004 2006 2008 2010 2012 2014
Retail sales (SA)
3-month moving average
Source: Ministry of Economy, Trade and Industry / Haver Analytics
Japan: Retail sales
Index: 2010=100
-3
-2
-1
0
1
2
3
4
2000 2004 2008 2012 2016 2020
% year
Source: Ministry of Internal Affairs and Communications / Oxford Economics
Forecast
Japan: Consumer price inflation
2% target

Emerging Market Economies
Chinese investment growth to slow further
The Chinese economy decelerated further in Q1 –
probably more than the authorities would like to see.
Both investment growth and industrial production
expansion have slowed since the end of 2014, and with
the HSBC PMI falling back below 50, domestic activity
does not appear to have picked up in March. Indeed,
CPI inflation was moderate again (1.4%) and import
volumes are estimated to have fallen substantially.
Property prices are still falling. This real estate
correction will continue to dampen activity over the
coming months, amplified by its effects on local
government (which rely heavily on property-related
funding). Local governments are an important source of
demand for the economy, but this year they will also be
constrained by central government policies to move
hidden liabilities to the public sector balance sheet.
These factors increase the risk of a significant shortfall
in investment spending. So we have lowered our GDP
growth forecast for this year to 6.6%, from 6.8% last
month.
Tight fiscal policy puts Brazil in recession
A new national accounts methodology has added 4% to
the size of Brazil’s economy, but the outlook is
unchanged. We expect activity to decline for most of
this year, causing GDP to contract by 1.3% in 2015
after a meagre 0.1% expansion in 2014. Domestic
demand will be squeezed by tight fiscal policy as the
government tries to prevent the debt-to-GDP ratio
pushing above the ratings agencies’ threshold for
investment grade status. Indeed, the GDP revisions
supported this aim by revising debt down to 59.0% of
GDP in 2014, from 63.0%. Tax cuts and squeezed
spending, together with tighter credit and high inflation
(a 20.0% fall in the exchange rate so far this year will
push import prices up) will contribute to the first fall in
household spending since 2003.
Better outlook for India…
Lower fuel prices, steadily reducing inflation and higher
business and investor confidence suggest that growth
in India will accelerate in the coming months. Industrial
production increased for the fifth consecutive month in
February – by 5.0% year-on-year, and manufacturing
PMIs have been consistently expansionary so far this
year. Further monetary policy loosening is also in
prospect. Major banks have yet to pass on the 50bp
reduction in interest rates since January to their
customers, and we expect the RBI to lower the policy
2
4
6
8
10
12
14
16
18
20
2004 2006 2008 2010 2012 2014
% year
Headline CPI
Source: Haver Analytics / Oxford Economics
Brazil: CPI measures & Selic interest rate
CPI ex regulated prices
& food & drink
Selic interest rate
-3
0
3
6
9
12
15
18
21
2004 2006 2008 2010 2012 2014
% year
Food wholesale prices
India: Prices
Urban & rural CPI
Wholesale prices (WPI)

rate by another 50bp over the course of the year,
bringing it to 7.0%.
Narendra Modi’s current international tour raises India’s
profile abroad, but it will only attract foreign investors if
backed by policies to improve India’s business
environment. Some progress has been made, including
the planned introduction of a goods and services tax in
April 2016 and increased FDI caps in key sectors like
railways, insurance and defence. Still, India still has a
long way to go to in implementing structural reforms.
We expect GDP to increase by 7.5% this year and
next, slightly up from 7.2% in 2014.
…and slightly less bad for Russia
A partial reversal of December’s sharp monetary
tightening means the economy will not contract quite as
severely as seemed likely at the beginning of the year.
Since January, policy rates have been cut by 300bp to
14.0% in response to stabilising oil prices and rouble.
Further monetary easing is on the cards over the
course of this year as the central bank prioritises
weakening growth over inflation. Lower rates will help
ease the tight financial conditions facing business and
households. We think the economy will shrink by 5.6%
this year, slightly less than the 6.2% fall forecast last
month. It should start to grow again from next year –
although only by 0.9%.
Risks rise in Turkey ahead of election…
The expected boost to consumption in Turkey from
cheaper oil and the gradual unwinding of tight monetary
policy should support domestic demand. But continued
weakness in external demand may limit the benefits to
exporters of a weaker lira; while imported inflation could
jeopardize the pace at which the central bank is able to
deliver further cuts. We expect the economy to grow by
3.3% this year, but the credibility of policy-making after
June’s general elections is in question.
…and in Korea from US$ strength
The won has held up against the US$ better than most
other currencies in the region, but this is damaging the
competitiveness of Korea’s exports. The PMI for March
indicates contraction in manufacturing, and faster credit
growth has not so far boosted retail sales. Furthermore,
high household debt means the central bank will be
wary about cutting interest rates to boost demand – we
expect rates to remain unchanged for the rest of this
year. These developments indicate strong downside
risks to our forecast for growth of 3.5% this year and
3.7% in 2016.
0
3
6
9
12
15
18
21
24
Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15
%
Source: Haver Analytics
Russia: Short-term interest rates
Interbank rate (31 to 90 days)
1-week repo rate
%
Russia: Short-term interest rates
10 year bond yield
-40
-30
-20
-10
0
10
20
30
40
50
2001 2003 2005 2007 2009 2011 2013 2015
% year
Turkey: Real GDP
Exports
GDP
Consumer
spending
Investment
65
70
75
80
85
90
95
100
105
110
115
Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15
Index (Dec 30, 2010 = 100)
China
Emergers: Exchange rates v US$
India
Indonesia
Korea
appreciation

Glossary of commonly used terms and abbreviations
Airline industry indicators
ASK Available Seat Kilometers. Indicator of airline supply, available seats x
kilometers flown
PLF Passenger Load Factor. Indicator of airline capacity. Equal to revenue
passenger kilometers (RPK) / available seat kilometers (ASK)
RPK Revenue Passenger Kilometers. Indicator of airline demand, paying
passenger x kilometers flown
3mth mav Three month moving average
Hotel industry indicators
ADR Average Daily Rate – Indicator of hotel room pricing. Equal to hotel room
revenue / rooms sold in a given period
Occ Occupancy Rate – Indicator of hotel performance. Equal to the number of
hotel rooms sold / room supply
RevPAR Revenue per Available Room – Indicator of hotel performance. Equal to
hotel room revenue / rooms available in a given period
Central Banks
BoE Bank of England;
MPC Monetary Policy Committee of BoE
BoJ Bank of Japan
ECB European Central Bank
Fed Federal Reserve (US)
RBI Reserve Bank of India
OBR Office for Budget Responsilbility
Economic indicators and terms
BP Basis Point – A unit equal to one hundredth of a percentage point
Broad money Key indicator of money supply and liquidity including currency
holdings as well as bank deposits that can easily be converted to
cash
CPI Consumer Price Index – Measure of price inflation for consumer
goods
FDI Foreign Direct Investment – Investment form one country into
another, usually by companies rather than governments
GDP Gross Domestic Product – The value of goods and services
produced in a given economy

LCU Local Currency Unit – The national unit of currency of a given
country, e.g. pound, euro, etc.
PMI Purchasing Managers’ Index – Indicator of producers’ sentiment
and the direction of the economy
PPI Purchase Price Index – Measure of inflation of input prices to
producers of goods and services
PPP Purchasing Power Parity – An implicit exchange rate which
equalises the price of identical goods and services in different
countries so they can be expressed with a common price
QE Quantitive Easing – Expansionary monetary policy pursued by
Central Banks involving asset purchases to reduce bond yields and
increase liquidity in capital markets
G7 Group of seven industrialised countries comprising US, UK, France,
Germany, Italy, Canada, Japan

ETC Member Organizations
Austria Austrian National Tourist Office (ANTO)
Belgium Flanders: Visit Flanders
Wallonia: Tourist Office for Wallonia-Brussels
Bulgaria Ministry of Economy and Energy
Croatia Croatian National Tourist Board (CNTB)
Cyprus Cyprus Tourism Organisation (CTO)
Czech Republic CzechTourism
Denmark VisitDenmark
Estonia Estonian Tourist Board - Enterprise Estonia (ETB)
Finland Visit Finland – Finpro ry
Germany German National Tourist Board (GNTB)
Greece Greek National Tourism Organisation (GNTO)
Hungary Hungarian Tourism Ltd.
Iceland Icelandic Tourist Board
Ireland Fáilte Ireland and Tourism Ireland Ltd.
Italy ENIT – Agenzia Nazionale del Turismo
Latvia Latvian Tourism Development Agency (TAVA)
Lithuania Lithuanian State Department of Tourism
Luxembourg Luxembourg National Tourist Office (ONT)
Malta Malta Tourism Authority (MTA)
Monaco Monaco Government Tourist and Convention Office (DTC)
Montenegro National Tourism Organisation of Montenegro
Norway Innovation Norway
Poland Polish National Tourist Office (PNTO)
Portugal Turismo de Portugal, I.P.
Romania Romanian National Authority for Tourism
San Marino State Office for Tourism
Serbia National Tourism Organisation of Serbia (TOS)
Slovakia Slovak Tourist Board
Slovenia SPIRIT Slovenia
Spain Turespaña - Instituto de Turismo de España
Sweden VisitSweden
Switzerland Switzerland Tourism (ST)
Turkey Ministry of Culture and Tourism

European Travel Commission - Trends & Prospects | Q1 2015

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European Travel Commission - Trends & Prospects | Q1 2015