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Presentation overview
* WTTC
* Macro-Drivers for global economy
* Travel & Tourism Growth
* Global Trends
* Implications for Travel & Tourism
Founding Members
Abercrombie & Kent
Accor
American Airlines
American Express
Avis, Inc.
British Airways plc
Canadian Pacific Hotels Corporation
Delta Air Lines
East Japan Railway Company
Hertz
Iberia
Regent International Hotels
The Promus Companies
Thrifty Rent-a-Car
United Airlines
Westin Hotels & Resorts
WTTC Purpose
To raise awareness of the importance of
Travel & Tourism and to work with
governments to realise the full potential of
the industry in creating sustainable wealth
and jobs.
Raising Awareness
IND ÚSTR IA D E VIA GEM & TUR ISMO
Hospitalidade, recreação, catering,
diversão, transporte, e outros
serviços relacionados
WTTC
ECONOMIA DE V IAGEM &
TUR ISMO
introduction
Impre ssão, publicação, energia,
ser viços f inanceir os,
of Travel &
forne cime nt o de equipamento,
alimentos, segurança,
administr ação, c onstr uç ão
civil, construção naval,
Tourism
forne cime nt o de be bidas,
fe rr o/aço, fabricação de
aer onave s, madeira,
Economy
miner ação, produtos químicos,
tê xte is, c ombustíveis, plást icos,
ser viços de sane ame nto, f lores,
Concept
decorações , produt os
me tálicos, com putadore s,
arquit etos, dese nvolvime nto de
re sort s, at acadist as, serviç os de
lavander ia, informática.
Headwinds for the world in 2008
Macro-Drivers
• Credit crunch continues to be a worry
on outlook
• High oil prices may become a major
constraint on growth
• US housing in trouble
• Weaker dollar
• China to record another year with 2-
digit growth
Robust global growth to
World: GDP growth continue…
% year
6 Market exchange
Forecast
rates
PPP
5 exchange
rates
4
3
2
1
0
1996 1998 2000 2002 2004 2006 2008
Source: Oxford Economics
Robust global growth to continue…
GDP growth
% quarter annualised
8
Forecast
6
4
2
0
-2
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Oxford Economics
Rapid Growth…oil price surge
Oil price
$/barrel
90
80 Real
(1995 US prices)
70
60
50
40
30
20
Nominal
10 F'cast
0
1973 1977 1981 1985 1989 1993 1997 2001 2005 2009
Source: Oxford Economics
Explaining the Forecast: 1) Expectations of slower economic growth- dent demand for energy
2) Nominal prospects of increase in OPEC production (December Meeting)
…buoyed by rising per capita incomes…
Frequency of overseas trips and rising Chinese outbound tourism market
£ 000s
Number of trips percapita income Tourist mn US$ bn
1.2 25 120 120
Outbound Chinese
1.1
tourists (LHS)
1 100 Travel spend (RHS) 100
20
0.9
0.8 GDP per capita 80 80
0.7 15
0.6 60 60
0.5 10
0.4 40 40
0.3 Trips per heads
0.2
5 20 20
0.1
0 0 0 0
1980 1985 1990 1995 2000 2005 2000 2001 2002 2003 2004 2005 2020
Source : Oxford Economics Source : WTO
…& diversification strategies…
Middle East's emergence as a destination
2000=100
180
170
160 Visitor numbers -
150 Middle East
140
130
120
110
Visitor numbers - Total
100
90
2000 2001 2002 2003 2004 2005 2006
Source : Oxford Economics
Greater integration also boosting
business travel…
Global business travel
% year %
30 as % of total service Forecast 8
imports (RHS)
25 7
6
20
5
15 Growth
(LHS) 4
10
3
5
2
0 1
-5 0
1989 1993 1997 2001 2005 2009 2013 2017
Source : Oxford Economics
Travel & Tourism developments
in 2007-2017…
Industry direct TT GDP and economy as a whole
% y on y
4.5
Total
GDP
4
3.5
3 TT industry
GDP
2.5
2
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source : Oxford Economics
The major stories: the rise of
the Middle East…
Tourism's share of investment & GDP in the Middle
Share of global overnight stays - Middle East
% % East
6 12
Investment
5 11
4 10
3 9
GDP
2 8
1 7
0 6
2000 2004 2008 2012 2016 2000 2004 2008 2012 2016
Source : Oxford Economics Source : Oxford Economics
China’s growing role in Travel &
Tourism…
China's share of the global tourism economy
%
14
GDP
12
10
8 Visitor exports (value)
6
4 Overnight stays
2
0
2000 2004 2008 2012 2016
Source : Oxford Economics
Total Demand WORLD
Personal T&T
Business Travel 2006 saw further
broad-based strength in
Government Expend.
the tourism economy.
Capital Investment
In 2007, growth is not
Visitor Exports
expected to be quite so
T&T Industry GDP dynamic as in 2006 as
Employment Ind. growth moves generally
T&T Econ. GDP closer to the trend rates
Employment Econ. embodied in the 10-
year annualized
0 1 2 3 4 5 6 7
forecast.
Ten Year 2007 2006
TRAVEL & TOURISM ECONOMY GDP THE
WORLD 2007 World Average
Oceania Caribbean
18%
North Africa Middle East
European Union
2007 T&T Economy GDP
15% Southeast Asia
(Percent of Total)
Northeast Asia
12%
Other
Western
9% Europe Central and
Eastern Europe
6%
North America
3% Latin America
Sub-Saharan Africa South Asia
0%
0% 2% 4% 6% 8%
T&T Economy GDP Growth 2008-2017
(Percent Annualized)
2007 – 2017
WORLD
Outlook for
the Middle East
TRAVEL & TOURISM ECONOMY GDP
MIDDLE Economy GDP
T&T EAST 2007 average
World Average
18% Middle East Kuwait 5.8
Bahrain 5.6
Oman 5.3
2007 T&T Economy GDP
15%
Saudi Arabia 5.2
(Percent of Total)
Lebanon 4.8
Syria 4.7
12%
Qatar
4.7
Jordan 4.5
9% Iran 4.2
UAE 3.5
Yemen 1.6
6%
3%
0%
0% 2% 4% 6% 8%
T&T Economy GDP Growth 2008-2017
(Percent Annualized)
Total Demand UAE
Personal T&T Expectations in 2007
Business Travel surpassed results from
2006 in all areas of
Government Expend.
tourism activities but
Capital Investment UAE has experienced
Visitor Exports major increase in
government
T&T Industry GDP expenditure, capital
Employment Ind. investment and visitor
T&T Econ. GDP
exports. Forecasts for
next years will be more
Employment Econ. stable.
0 5 10 15 20 25
Ten Year 2007 2006
Total Demand
QATAR
Personal T&T
Business Travel 2007 exceeded all
Government Expend. 2006 results in
Capital Investment
most tourism
activities with
Visitor Exports greatest increase
T&T Industry GDP in Business Travel
Employment Ind. and capital
investment.
T&T Econ. GDP
Employment Econ.
0 5 10 15 20 25
Ten Year 2007 2006
Total Demand
JORDAN
Personal T&T
Tourism activity has
Business Travel
generally slowed
Government Expend. down in 2007 but
government
Capital Investment
expenditure has
Visitor Exports increased which will
develop Jordan’s
T&T Industry GDP
Travel & Tourism at
Employment Ind. a stable and
T&T Econ. GDP
consistent rate over
the next ten years.
Employment Econ.
-5 0 5 10 15
Ten Year 2007 2006
Total Demand
Personal T&T BAHRAIN
Business Travel
2007 saw a marked
Government Expend. increase in capital
Capital Investment investment. All other
tourism activities for
Visitor Exports
Bahrain surpassed
T&T Industry GDP all growth
Employment Ind. expectation of 2006.
T&T Econ. GDP
Employment Econ.
0 10 20 30 40 50 60
Ten Year 2007 2006
Total Demand
OMAN
Personal T&T
Business Travel All tourism
Government Expend.
activities have
double in growth
Capital Investment
in 2007 and the
Visitor Exports industry will
T&T Industry GDP remain stable and
strong for coming
Employment Ind.
decade.
T&T Econ. GDP
Employment Econ.
-5 0 5 10 15 20
Ten Year 2007 2006
Top 5 Infrastructure Raking in
Middle East (World Rank/ 124)
Rank Air Transport Road Port
1 UAE (7) UAE (12) UAE (9)
2 Qatar (35) Kuwait (27) Bahrain (26)
3 Bahrain (37) Bahrain (29) Qatar (42)
4 Kuwait (47) Jordan (33) Kuwait (47)
5 Jordan (48) Qatar (48) Jordan (49)
Summary global view
Despite increased downside risks, it remains likely that
the slowdown in world GDP growth will be
limited because:
- rapidly expanding emerging economies
- these countries are recognizing the
development potential of the T&T
industry and investing accordingly
- Rapid economic growth boosting incomes and
creating an entire new range of customers
where international travel is now an option
- the easing in monetary policy by central banks
- strong corporate profitability outside of the
financial sector
Implications for the Travel &
Tourism Industry
• Deteriorating economic conditions, particularly
in the housing and credit markets across the
globe, increasing concerns about prospects for
the travel & tourism industry in 2008
• But the global slowdown is likely to be limited
with a contained impact on the industry
• US dollar’s weakness is curtailing the travel
plans of residents of dollar-bloc countries but
boosting their inbound tourism
• Higher energy prices are a two-pronged
challenge – they squeeze household budgets
and raise the cost of a key input for the
industry
Direction of forecast revisions
HEADLINE
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