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GLOBAL ECONOMY T


he good news for the global tourism industry is that it continues to outperform the overall growth of the


world’s economies, despite the impact of unrest and natural disasters in some regions and economic difficulties in key emerging source visitor markets. While the value of the global economy is expected to rise by 3.3% in 2015(1)


, the number


of international tourism arrivals rose by 4% during the first half of the year to reach a total of 538 million(2)


. If this momentum continues for


the rest of 2015 then travel and tourism will have outpaced overall gross domestic product (GDP) growth for the sixth consecutive year since the financial crisis of 2009. The Caribbean has been one of the best-


performing regions with a 7% rise in visitor numbers during the first six months of 2015, followed by Australasia, central and eastern Europe, and central America.(3) As for key source markets, it is far from


a uniform picture, even from mature markets within the world’s advanced nations. While demand has been strong this year from the US, France, Sweden and Spain, it has been weaker from the UK, Germany, Italy and Canada.(4) There is also a mixed pattern for emerging


source markets, with double-digit rises in visitors from both China and India in the first three months of 2015(5)


. However the impact


on tourism of the extreme volatility in the Chinese stock market in recent months has yet to become clear, as has the slowdown in the pace of the country’s growth.


EXCHANGE RATE WHEN CHOOSING YOUR NEXT HOLIDAY DESTINATION?


HOW IMPORTANT IS “


RICHARD SEALY, MINISTER OF TOURISM, BARBADOS, AND CHAIRMAN OF THE COUNCIL OF MINISTERS AND COMMISSIONERS OF TOURISM


KEY


 Not at all important 8%  Not important 10%  Neither important nor unimportant 37%


 Important 28%  Very important 16%


* UK holidaymakers were asked in early 2015 by Canadean how important a country's exchange rate was in their decision-making


2


With air service so critical to tourism to the Caribbean, we must keep on exploring the possibilities of additional airlift. Partnership will be


the buzz word of 2016 when it comes to encouraging more holidaymakers to visit and stay longer on our islands.


The region has started to see traffic coming from Eastern Europe, particularly Russia, and there’s a growing interest from Brazil, China, Central and South America. In March, Jamaica received 1,000 visitors from China - the single largest number of Chinese visitors to Jamaica so far.”


powers and emerging tourism source markets, e.g. Russia. The spectre of geopolitical turmoil, such as the ongoing Syrian civil war, and the risk of terrorist attacks that deliberately target tourists, such as the two massacres in Tunisia, may also have an impact. The global tourism industry has remained remarkably robust throughout similar crises over the last few years, although individual destinations have suffered from major incidents happening in their country or region. As for potential growth in 2016, the


International Monetary Fund is currently predicting that the world‘s GDP will rise by 3.8% with a continued pick-up in the advanced world economies where it is predicting a 2.4% year-on-year rise in GDP.(7) The pace of growth in the emerging


markets and developing economies should also begin picking up again after dipping slightly in 2014 and 2015. Travel and tourism’s contribution to global GDP is also forecast to grow at an annual rate of 3.8% from 2015 to 2025, although this is down from a previous forecast of 4.1% - mainly due to a downgrade in China’s long- term economic growth prospects.(8) For key source markets, the US economy


is expected to grow by 2.8% this year and then by 3.3% in 2016 (9)


, with the Other emerging markets such as Russia


and Brazil have both already suffered economically due to the drop in the value of their currencies against the dollar.(6) The fall in the price of oil and other


commodities has also been a double-edged sword for the travel industry. On the positive side, lower fuel bills has increased the purchasing power and demand from tourists living in non-oil producing markets as living costs have fallen. But it has done the opposite for major energy-producing


Sources & further reading 1


2-5 United Nations World Tourism Organization (UNWTO) mkt.unwto.org/barometer 6 World Bank www.worldbank.org/en/publication/global-economic-prospects 7 IMF www.imf.org/external/pubs/ft/weo/2015/update/02/ 8 UNWTO mkt.unwto.org/barometer 9-10 World Bank www.worldbank.org/en/publication/global-economic-prospects 11 IMF www.imf.org/external/pubs/ft/weo/2015/update/02/





continued strength of the dollar making international travel more affordable for the American market. The UK economy is expected to grow by 2.6% in both 2015 and 2016 – although this is down from a rise in GDP of 2.8% in 2014. Economic growth is set to rise in the eurozone area from a predicted 1.5% this year to 1.8% in 2016. Russia may also rebound next year with growth of 0.7% after a decline of 2.7% in 2015. (10) The main risks to attaining this level of


economic growth are “increased market volatility” including Greece’s ongoing financial problems, and “economic distress” from geopolitical factors. (11)


Despite increased volatility, tourism continues to consolidate the positive performance it has had over the last five years and to provide development and economic opportunities worldwide.” TALEB RIFAI, UNWTO SECRETARY-GENERAL


International Monetary Fund (IMF) www.imf.org/external/pubs/ft/weo/2015/update/02/


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