This month’s Market Review looks at travel tourism; a market where the top 20 world economies contribute some 4.6 billion tourist trips.

Jan13_growing

13January_steady

Jan13_decline

Source: Mintel Global Market Sizes

Flying High?

Policy Makers Favorite

Tourism is an area which many governments regard as a key way to develop an economy or pull it out of the doldrums. Indeed, Mintel’s Travel and Tourism series examines this aspect as part of its global coverage of the sector. A major benefit is that this is a relatively labor intensive industry and can provide a major stimulus to growth, with an added bonus of increasing foreign earnings. However, by contrast to many sectors reviewed in the Barometer, there is more susceptibility to events outside the country. The economic downturn in outbound countries and various terrorist incidents are testimony to this.

Stimulating Events

As the real cost of travel has the made the world get smaller, then global events staged in a country have increasingly had some impact. However, this can be overplayed. Brazil has been the best performing of the countries reviewed; and yet it still has the World Cup and Olympics to come. By contrast, the staging of the World Cup in 2010 did not do enough to lift South Africa out of its last place for the past five year performance.

Staycation

The main reason for this is that domestic trips are the mainstay in most markets. This was certainly the case in Brazil; but in India and Japan tourism is particularly reliant on its residents. These two countries illustrate that tourism is not just related to the level of development. Cultural influences are important; much of Indian domestic tourism is taken by pilgrims visiting their favorite religious sites. Furthermore, as global affluence and urbanization grows and the population becomes more dispersed, so there are more opportunities for the tourism industry. In terms of numbers of trips the size of the country, both geographically and demographically, is becoming a key factor. So although the US still provides the largest market; India and China are now the second and third largest.


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