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Welcome to the

ITB Academy Webinar World Travel Trends

Report 2014/2015

ROLF FREITAG, President of IPK International Pisa, 29 October, 2013 2 IPK INTERNATIONAL TOURISM RESEARCH ▪ TOURISM MARKETING ▪ WORLD TRAVEL MONITOR® 2

“World Travel Trends 2014

And What Lies Ahead”

My information today is based on:

• Latest results of our World

Travel Monitor Survey in 63

countries of origin

• Results of our 22th World Travel

Monitor Forum in Pisa,

sponsored by ITB Berlin

Rolf Freitag

President of IPK International

Munich, December 10, 2014


IPK International has a global tourism

service program


The Database Is Our World Travel Monitor


European Travel Monitor

33 countries – 99% market coverage

Asian Travel Monitor

16 countries –

87% market coverage

American Travel

Monitor

14 countries –

99% market

coverage

Representative data you can trust -

travel to all destinations worldwide

The World Travel Monitor® Delivers

Premium Data from 63 Countries of Origin

covering 90% of global

outbound demand

New

IRAN


WTM Value Creation in Three Steps

• 63 national opinion research institutes are delivering

regularly representative travel behavior data to our

data center in Lucerne

• Our data center transforms these data into travel

information

• Our research team in Munich transforms this

information into useful tourism „knowledge on

demand“ for our clients


Outlook on the World Economy

2014 & 2015

Global GDP is expected to grow

• 3.3% in 2014

• and 3.5% in 2015,

both figures a tick lower than expected in mid

2014.

Source: ifo Institut, Munich



2014 & 2015

Major Economies with particularly weak

growth in 2014/15:

• Russia (0.5 and 0.8%)

• Brazil (0.3% and 1.4%)

• Euro area (0.8% and 1.1%)




2014 & 2015

Favorably positioned major economies:

• USA (2.2% and 3.2%)

• China (in both years slightly above 7%)

• India (about 6% in both years)



The New World Was Driving Global Economy Is the “New World” Party Over?

Eu

rop

e

• Poland

• Russia

• Turkey

256 Million

Lati

n A

meri

ca

• Brazil

• Chile

• Colombia

• Mexico

• Peru

405 Million

Asia

• China

• India

• Indonesia

• South Korea

• Malaysia

• Philippines

• Taiwan

• Thailand

3.094 Million

Suddenly some hesitant trends have shown up


2014

Many Destinations Were In Distress

Violence and political unrest in 35 countries

remained in the headlines for some key

destinations keeping travelers away, sometimes

in droves - not to forget Ebola


2014

Terror, Bombing and Robberies

• Arabian Unrest has become „Islamic

Unrest“

• Afghanistan, Pakistan, Iraq, Syria, Yemen

and parts of Nigeria and Mali have become

no go destinations

• Kenya has become a risky destination -

Bombing and Islamic terror was coming

close to tourism resorts

• Increasing number of bombing and

robberies on tourist buses has also been

registered in Peru and Chile


Now EBOLA Epidemia Makes Not Only

Western Africa A Risky Destination

• International media appeared to be over-

dramatising the threat to tourism

• Nevertheless, Africa in general has been

impacted by consumer fears about the

potential risks

• However at this moment it’s too early to judge

what impact the Ebola outbreak might have on

international travel as a whole


The New Danger

Although the number of countries in crisis has not

increased that much, the crises are inching ever closer

to the European key countries of origin

This could soon lead to a major reorientation in

international travel patterns

On August 7, 2014, Mario Draghi

said: “If you look at the world

today, you’ll see that geopolitical

risks have increased all over”


2014

Quite a few fronts all at once

And in the middle of it all, tourism professionals

trying to keep tourism an important driver of the

global economy


World Tourism Panorama 2014 Preliminary results based on IPK’s World Travel Survey 01–08 / 2014

Where is the world headed?

Pictures: ©[Weidenhofer, Vinzenz]/123RF.COM, ©[1xpert]/123RF.COM, ©[Shtanzman]/123RF.COM


2014

Many Problems And Some Question Marks

Nevertheless 2014

has become

another excellent

global travel year


World Outbound Travel 2014

Key Figures

Source: World Travel Monitor 1-8 2014, IPK International

Turnover

+ 6 %

Trips

+ 4.5 %

Nights

+ 3 %


World Outbound Travel 2011-2014

Key Figures

Source: World Travel Monitor 2011 - 2014, IPK International

2011 2012 2013 2014 YTD

Outbound trips +5% +4% +4% +4.5%

Outbound nights +4% +2% +4% +3%

Outbound spending

in US$ +8% +4% +6% +6%



All-time Outbound High From Asia/Oceania

+8%

Source: World Travel Monitor® Trend 1-8/2014 , IPK International

With an above average

growth of intra-regional

travel within Asia



South American outbound travel slows

+ 5%


Stong intra-regional travel to

Brazil

World Cup did stop the Brazilians

travelling abroad



North American outbound travel picks up as

economy growth

+ 5%

Finally growth was also coming from USA

Weaker Canadian Outbound to USA

Strong US Outbound

„Millennials“ (aged up to 33) drive the US outbound growth




All-time high from Africa

+4%

Source: World Travel Monitor® Trend 1-8/2014 , IPK International and National Statistics


+ 3%


Solid growth for European Outbound


(More details about the European

Outbound Trends will follow later)


- 4%


Middle East Outbound was negative




Long Haul vs. Short Haul

Source: World Travel Monitor 1-8 2014 ,IPK International

Long-haul travel continued to grow faster than short-haul

travel in 2014

Rank Top Long Haul

SOURCE MARKETS

Top Long Haul

DESTINATIONS

1 USA USA

2 United Kingdom United Kingdom

3 China Thailand

4 Canada Italy

5 Japan China

6 Germany Germany



Why Do People Travel Abroad?


Holidays +31% over the

last 5 years

Business

VFR



What Was Driving the World Holiday Market?

Source: World Travel Monitor 2009-2014 ,IPK International

Growth over the

last 5 years Market Share

Sun & Beach +18% 28% Decreasing Share

Touring +32% 23% Increasing Share

City Trips +58% 20% Increasing Share

Countryside -17% 11% Decreasing Share



City Trips are the Boom Market Segment

• Official statistics are tabulated according to

administrative boundaries

They don’t inform about economic links

between the city and its surroundings



New: Metropolitan Destinations

• Only a portion of the city holidaymakers

overnight within the city limits - others stay in

the city’s day trip catchment area

• Together they form the city’s interactional area


Global Rank 1

Paris and surroundings

Source: World Travel Monitor 2014 ,IPK International

18.8 Mio.

International

Visitors



Global Rank 2

New York and surroundings

18.5 Mio.

International

Visitors



Global Rank 3

London and surroundings

16.1 Mio.

International

Visitors



Global Rank 4

Bangkok and surroundings

14.6 Mio.

International

Visitors



Global Rank 5

Barcelona and surroundings

12.4 Mio.

International

Visitors



Global Rank 6

Singapore and surroundings

10.6 Mio.

International

Visitors



What Was Driving the World Business Market?


54% 46%

Traditional Decreasing Share

MICE

Increasing Share


41%

29%

15% 15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Conference /Meetings /Seminars

Trade Fair /Exhibition

Convention /Congress

Incentive Trip


MICE Travel by Purpose of Trip




World Outbound Accommodation Choice

*Others: bed & breakfast; tent/caravan; ship/boat/cruise/yacht; youth hostel/family hostel; holiday club; pension …

Hotel 60%

VFR 8%

Holiday Home 20%

Others* 12%

Para- Hotellerie*

40%

Share and change in % of trips

Budget

+ 18%

Middle

+ 10%

Upper

+ 23%

Source: World Travel Monitor® 2009 – 2014 , IPK International

Para-

Hotellerie*

+ 35%

!!!

Sharing Economy



Sharing Economy in the Accommodation

Business

Source: World Travel Monitor®, IPK International, Travel Industry Intelligence Company Skift

• Dramatic growth of so-

called “sharing” firms (e.g.

Airbnb, Homeaway, Wimdu

etc.)

Airbnb offers 330,000 rooms worldwide and has become

one of the world’s ten largest “hospitality brands”!



The Sharing Tourism Business Model

Source: World Travel Monitor®, IPK International, Travel Industry Intelligence Company Skift

Only Investment into “Digital Platforms” but offering

• More individual choice

• Lower prices

• Better accessibility

• Greater flexibility

• Ease of use

• Transparency

• Interactive communications

“User-focused Mission”


World Outbound Travel 2009 - 2014

World Outbound Transportation Choice

Air

Share 57%

Source: World Travel Monitor® 2009 - 2014, IPK International

Car

Share 26% Share 7%

Coach

Share 5%

Train

Increasing share

Decreasing share Decreasing share Decreasing share


Internet Travel Agency Directly withHotel

Directly Carrier Others


Choice of booking channels* - Trend

*multiple answers possible

66% Internet bookings +7% slowing growth rate! – soon saturation?

24% Travel Agency bookings +1% consolidation of market share

Source: World Travel Monitor® 2009 – 2014, IPK International


4% (2%)

5% (2%)

7% (2%)

Europe

Japan

USA

China

Share of Smartphone Online Bookings 2014 (2013)

10% (4%)

Source: World Travel Monitor® Trend 1-8/2014, IPK International


Booking via Smartphone –

gaining market share


Boomer 2014

Social Media Use For Outbound Travel

China 95%

Brazil 84%

USA 65%

Europe 61%

Japan 51%

“Do you use special travel blogs,

travel forums, rating or review sites,

with regard to your travel and

holiday planning?”

Source: World Travel Monitor® Trend 1-8/2014, IPK International


Boomer 2014

Social Media

Source: World Travel Monitor® , IPK International, Digital Transformation Group

• Social Media has heavy influence on travel before,

during and after a journey

• Social Media today is used by all demographic groups

• It is much more diverse than just the well known

leading platforms (like Facebook, Twitter, etc.)

• Travel companies can use social media for marketing,

brand monitoring, customer services, crises

response etc.


Robust Europeans keep

travelling despite conflicts

European Travel Trends 2014


European Outbound Travel 2014

Weak Economic Growth

Source: ifo Institute 2014

GDP

Development Eurozone Germany France Italy

2014 + 0.8% + 1.3% + 0.3% - 0.3%

2015 + 1.1% + 1.2% + 0.5% + 0.3%

GDP

Development Poland Great Britain Sweden Norway

2014 + 3.2% + 3.0% + 2.0% + 1.9%

2015 + 3.2% + 2.2% + 2.1% + 2.1%

Outside the eurozone



Key Trends


Turnover

+ 4 %

Trips

+ 3 %

Nights

± 0 %


Europe

+3%

Africa

+1%

Asia

+7%

Pacific

+5%

North

America

+6%

South America

+5%

Central

America

+7%

Caribbean

+6%


Strong Growth in Long-haul Travel




Russian Outbound Travel Market Doubles

up to 2013

100

120

140

160

180

200

220

2005 2006 2007 2008 2009 2010 2011 2012 2013

Russian Outbound Trips 2005 - 2013 (2005 = Index 100)




Russian Slowdown in 2014

Trips

- 1%

Total Russian Outbound BUT

Excluding the decreased trips

to the Ukraine,

Russian Outbound Travel is positive

Trips

+ 10 %




Influence of the Ukrainian Crisis

2%

5%

10%

18%

Traveling to other destinations(instead to Europe)

No travelling

Travelling in own country

Less expensive trips

Price will be the decisive factor in 2015



Every six months, our World Travel Monitor® poses

some prospective questions concerning outbound

travel planning:

• in Europe

• in South America

• in North America

• in Asia

World Outbound Travel Prognosis 2015


IPK’s World Travel Confidence Index 2015

Above 100 = increase

Around 100 = growth threshold

Below 100 = decrease


Actually the Confidence Index for European

Outbound Travel is at 103

Therefore another year of solid European

outbound growth can be expected (+3%).

European Travel Confidence Index 2015



Despite Ruble devaluation and Ukrainian crisis

the Confidence Index for Russian Outbound

Travel is at 104

Following our most recent survey another year

of solid growth (+4%) is still possible.

Russian Travel Confidence Index 2015



Actually the Confidence Index for Outbound

Travel from South American is at 103

So we can expect a further year of growth (+3%)

However, since 2013 growth rates are declining.

South American Travel Confidence

Index 2015



The Confidence Index for Outbound Travel

from North American is at 103

Therefore we can expect another year of solid

outbound growth from North America (+3%).

North American Travel Confidence 2015



The Confidence Index for Outbound Travel from

Asia remains very high with 108

An ongoing very positive perspective for Asian

outbound travel can be expected (+8%).

Asian Travel Confidence Index 2015



Actually the Confidence Index for World

Outbound Travel is at 105

Thus, another growth of 4% to 5% can be

expected for travel year 2015.

World Travel Confidence 2015


IPK INTERNATIONAL TOURISM RESEARCH ▪ TOURISM MARKETING ▪ WORLD TRAVEL MONITOR® 62

Thank you very much!

IPK International

Stefanie Grothe

E-Mail: [email protected]

www.ipkinternational.com

ITB Academy

Jessica Varga

Tel. +49 30 3038 2528

E-Mail: [email protected]

mailto:[email protected]




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