Airlines are always keen to find new ways to extract money from their customers. Now several airlines have begun selling gourmet food to the passengers in the cheap seats, for a price. In February Air France has started tempting economy-class customers with paid-for meal upgrades featuring foie gras terrine. eg. duck confit with mushrooms and sauteed potatoes, followed by Opera cake for dessert, costing €18. So-called ancillary sales ranging from food to overhead-bin space have jumped more than tenfold to $36 billion since 2007, amounting to 5% of the total $680 billion earned by airlines in 2012. They are expected to rise to $50 billion per year by 2019 or so. “The low-cost carriers have taken ancillary revenue from a normal way of doing business and turned it almost into an art form.” Revenue streams that remain untapped — in-flight entertainment, wireless access and shopping — could be worth $5 billion. “When people get on board an aircraft, they’re actually in a great retail mindset. About an hour into the flight, they start to relax and their mind opens.Opening their wallets, too, has become a major ambition of airlines”. So much for the fake concern about the odd few $$s or €€s in aviation taxes on their “hard working family” passengers.
Foie Gras Now Served in Coach Class as Airlines Spice Up Profit
By Kari Lundgren & Robert Wall (Bloomberg)
Jun 5, 2013
Alex Kraus/Bloomberg
A flight attendant serves drinks on an Airbus A380.
The days of bland economy-class food are numbered, with Europe’s full-service carriers dishing up gourmet menus reminiscent of the golden age of air travel as they look for ways to squeeze more revenue out of passengers.
Air Canada Chief Executive Officer Calin Rovinescu said, “In terms of competing with new entrants, with folks who have a significantly lower cost than we do, the best way of competing was to give the exact same price on the base fare and then start incrementally adding to that.” Photographer: Nadine Hutton/Bloomberg
British Airways in February started sales of cheaper hand-luggage-only tickets, a move consumer groups say amounts to charging for checked bags. As well as establishing checked luggage as a generator of revenue, the move has the advantage of reducing take-off weight, allowing for lower fuel consumption and faster turnaround times. Photographer: Chris Ratcliffe/Bloomberg
Air France is tempting economy-class customers with paid-for meal upgrades featuring foie gras terrine, and Austrian Airlineshas Wiener schnitzel and sushi among its 15-euro ($19.60) in-flight nourishments. They’re part of a growing trend of carriers charging for auxiliary services, including lounge access or individual aircraft seat choice.
The move comes two decades after Ryanair Holdings Plcstarted a cultural revolution in Europe by making passengers pay for snacks and drinks. So-called ancillary sales ranging from food to overhead-bin space have jumped more than tenfold to $36 billion since 2007, amounting to 5 percent of the total $680 billion earned by airlines last year, International Air Transport Association Chief Executive Officer Tony Tyler said.
“The low-cost carriers have taken ancillary revenue from a normal way of doing business and turned it almost into an art form,” said John Dabkowski, managing director for airline technology company Navitaire Inc. “They’ve set the customer’s expectation, so people now are not offended by it.”
Untapped Niches
Ancillary sales will rise to $50 billion in the next five years, John Thomas, a senior managing director at L.E.K. Consulting LLC said this week in Cape Town, where IATA held its annual meeting to discuss industry trends. Revenue streams that remain untapped — in-flight entertainment, wireless access and shopping — could be worth about $5 billion, he said.
“When people get on board an aircraft, they’re actually in a great retail mindset,” Thomas said. “About an hour into the flight, they start to relax and their mind opens.”
Opening their wallets, too, has become a major ambition of airlines. Air Canada has seen ancillary revenues for services ranging from baggage fees to lounge access climb 30 percent annually since 2009, CEO Calin Rovinescu said.
“In terms of competing with new entrants, with folks who have a significantly lower cost than we do, the best way of competing was to give the exact same price on the base fare and then start incrementally adding to that,” Rovinescu said.
Air France sold more than 26,000 menu upgrades priced at 12 euros and 28 euros to economy- and premium-economy fliers in the nine months to March 31. The Paris-based carrier’s duck confit with mushrooms and sauteed potatoes, followed by Opera cake for dessert, costs 18 euros. EasyJet Plc, Europe’s No. 2 discount carrier, charges 8 euros for its “meal deal” featuring a sandwich, tea or coffee and a Twix chocolate bar.
New Model
“We’re moving away from historic all-in pricing,” said Donal O’Neill, an analyst at Goodbody Stockbrokers in Dublin. “For airlines like Air France, where the margins are so razor thin at the moment, every cost saving can be material.”
Pre-booking is key to boosting quality while trimming waste, helping to make the paid-for-food model cost effective, said Caroline Hanly, head of catering at Dublin-based Aer Lingus Group Plc, which began offering three-course upgrades to economy-class passengers on trans-Atlantic trips in February.
“We’re going to know exactly how many people on board are going to want certain meals,” Hanly said in an interview. By selecting traditional Irish fare such as soda bread and black pudding, it’s also an opportunity for Aer Lingus to highlight its status as an indigenous Irish brand, she said.
Design Challenges
Regardless of the quality of food, catering also poses a design challenge to manufacturers Airbus SAS and Boeing, who must build galleys sufficiently large to cater for three meals on long-distance flights lasting more than 12 hours, said Tim Clark, president of Emirates, the world’s largest airline known for its lavish premium product including in-flight showers.
EasyJet sold almost one million bacon sandwiches in 2012 from its “Cafe in the Sky” range, plus 14 million drinks including Starbucks Corp. coffee, helping boost in-flight sales 10 percent.
“They’re commoditizing the seat and filling out the rest of the experience with retail offering of some description,” said Goodbody’s O’Neill. “The more they split those out and manage the cost base of each item, the more profitable they’ll be.”
Full-service carriers are taking note and following suit. British Airways in February started sales of cheaper hand-luggage-only tickets, a move consumer groups say amounts to charging for checked bags. As well as establishing checked luggage as a generator of revenue, the move has the advantage of reducing take-off weight, allowing for lower fuel consumption and faster turnaround times.
Passengers on European routes are prepared to pay as much as 40 euros for add-on items and, and airlines will ultimately demand cash for all aspects of flying beyond the basic journey, especially once they’ve exhausted options for paring expenses, said Bjoern Maul of Roland Berger Strategy Consultants GmbH.
“We’re just scratching the surface,” said Jim Davidson, CEO of aviation adviser Farelogix Inc. “You can actually democratize the back of the cabin and that’s pretty exciting, so someone who only flies two or three times a year, if they want to be treated like a frequent flier they have the capability to do that.”
If the airlines can’t make enough profit from flying their passengers from A to B, then they want to extract every bit of cash they can from them, in the airport shops. An anna-aero article discusses how airports and airlines might work more effectively together, to get passengers to buy more stuff. The airlines have more personal data about the passengers, and the airports want this data in order to maximise the retail earnings in their shops. But the airlines don’t want to share the chance of profit with the airports. The Chief Commercial Officer at Manchester Airports Group said – “airport retail is vital precisely because airport charges paid by airlines are already well below the cost of the infrastructure they use.” The airports and airlines don’t see eye to eye on this. There is a problem for retailers, with the low cost airlines that limit baggage, and the ‘one-bag rule’, which is a disincentive to buy a lot at the airport. An ACI conference next spring will look at actual practical solutions to enhance “Airline-Airport Cooperation to Increase Passenger Spend.”
The next opportunity to attract airlines – collaborating to enhance airport retail revenues
24.4.2013 (anna aero)
Hungry airports are bending over backwards to find (legal) means to attract airlines with minimal charges, shared marketing costs, and PSO deals etc. But airlines on the polar-opposite of the spectrum, including Lufthansa and Ryanair, seem to agree that airports are missing a real possibility: To cooperate with airports to build and share airport retail revenues.
It’s a simple principle: Airlines possess 100% of the data on flyers – email, gender, what credit card they use and, crucially, which two airports they will be visiting on any given trip.
In contrast, airports only know who is flying in far more general terms – unless the traveller has pre-booked parking – a rapidly increasing trend, but still a far less precise method of data capture than the comprehensive detail possessed by airlines.
As the airlines have the data, and the airports have the great shops, it does not take a genius to work out that both parties separately possess all the tools they need to work together to promote offers.
Ken O’Toole, the Chief Commercial Officer of Manchester Airports Group – and therefore responsible for both aviation development and the retail which brings in the remaining 48% of MAG’s revenues – is also the former Ryanair Director of New Route Development, so he knows very well what’s at stake by any notion of cooperation or sharing precious retail income: “If I said I was nervous I would not be understating it – we want to protect these revenue streams, while engaging with the airlines.”
Of course it’s only right for airports to be terrified of airlines like Ryanair finding yet another new way of squeezing money out of them. As O’Toole points out – “airport retail is vital precisely because airport charges paid by airlines are already well below the cost of the infrastructure they use.”
But, clearly it makes sense to at least explore moving beyond the zero cooperation between airports and airlines to see if they can create BRAND NEW retail revenue streams. “We have 180 airports in the network and countless others knocking on the door to get a Ryanair route – yet in two years I have had only three vague approaches to consider commercial cooperation,” said Ryanair’s ancillary revenue boss Walsh, who thinks he has a lot to offer from 80 million real customers and 290 million unique visits to the Ryanair website. “Do we have a plan? No. Do I have an interest? Yes.”
Airports and leading airport retailers assembled in Hamburg had mixed feelings about the idea. When asked for his opinion, World Duty Free’s Fred Creighton was particularly scathing about the idea and could not see a roadmap to progress until one giant roadblock is cleared – the ‘one-bag rule’ which has caused very specific damage to retail, and much resentment among passengers who have been stripped of their liquor and chocolate, or forced to pay for an extra bag at more than face value of the purchase.
Walsh was not in a position to offer any kind of resolution to this profound disagreement, but he felt that: “focusing on the one bag rule as the obstacle to moving forward means focusing on the problem and not the opportunity.”
Filip Soete, Marketing Director Nice Côte D’Azur Aéroport, a former Chairman of the ACI EUROPE Commercial Forum and who, like O’Toole, controls a portfolio spanning both aviation development and retail, also spent some time working on airport-airline retail initiatives. “Sharing is a sensitive and complex challenge –it’s a tripartite issue, not only involving airports, but also the concessionaires with whom we have existing agreements, but I agree that it something that should be explored – everyone is looking at everyone else to see who will make the first step.”
So what should be this “first step?”
In listening to the debate, anna.aero agrees with O’Toole that airports would be foolish to offer airlines the chance to slice and cannibalise their cherished retail revenues. Instead efforts should definitely be focused on the unanimous agreement that the average retail spend per passenger is still vastly below potential – less than $9, even at Rolex-selling London Heathrow – and therefore the “first steps” should be trials and pilot schemes for specific products and services, or promotions which can clearly be identified as “new spending.”
As a big fan of chocolate gifts (and cakes), anna.aero thinks that one idea would be create a special box of chocolates which is only promoted on the airline confirmation emails and boarding passes. If it sells, then the airline-airport cooperation plan to increase passenger spend would be shown to make some sense. Ken O’Toole says it is “blue skies thinking”. But if this initiative amounts to an increase of just 10 cents per passenger that would be worth $8m specifically from Ryanair’s contribution – or $80 million from traffic across Europe.
While there was not clear agreement on how this collaboration should work in Hamburg, there was willing from both sides. So it was announced that the 2014 ACI EUROPE Airport Trading Conference, being hosted by Zurich Airport next spring, would focus on reaching actual practical solutions and would undoubtedly become the event where airports and airlines meet and advance real means to enhance “Airline-Airport Cooperation to Increase Passenger Spend.”
Heathrow award for top airport for shopping for 3rd year. Net Retail Income per passenger £6.21 in 2012 (£5.64 in 2010)
Date added: April 18, 2013
For the third year, Heathrow got the award (within the airports industry) for the top airport for shopping. Heathrow has over 52,000 square metres of retail space and more than 340 retail and catering outlets. Heathrow overtook Dubai International to win the title of “World’s Best Airport for Shopping” for 2012. Heathrow has the highest retail sales of any airport in the world ahead of Incheon airport in South Korea. Figures from the Moodie Report in February 2013 said that Net Retail Income per passenger at Heathrow was £6.21 (up 4.4% on 2011, partly due to the Olympics) in 2012 and £5.95 in 2011, while it was £5.64 in 2010. (By comparison the Net Retail Income at Stansted in 2012 was £4.27 per passenger). At Heathrow in 2012 the gross retail income increased +5.7% to £460.1 million
Airport retail: rise and rise of the shopping centre, with an airport attached
Date added: April 15, 2012
A huge, and growing, proportion of the money made by airports is from retail. It seems that the industry expects significant increases in this spending over the coming years, and airports do all they can to get passengers to spend as much time as possible in retail, put retail outlets in arrivals, etc etc and devise means for them to buy goods for collection on their return, to avoid baggage problems. The industry expects most growth in the Far East, where women tend to spend a lot of designer brands. The airport retail industry finds passengers buy less when they are stressed by airport security waits and queues, and they buy more when calm and happy. Airports need a ticket as proof of identity, so they can monitor the types of travellers, and the routes, which generate the most cash. Seems the Chinese, the Russians and the Nigerians tend to spend the most. At Heathrow, the average passenger spends £4.35. But for fashion, the average BRIC passenger spends £45.50. No wonder BAA wants more.
How much profit do airports make from their retail activities, rather than flying?
Date added: February 13, 2012
Heathrow got 21.3% of its income from retail in 2010, compared to 53% from aeronautical. On average each Heathrow passenger spent about £5.70 (maybe £5.90) at the airport, with women spending more than men (!). BAA data say frequent fliers spend more than infrequent fliers. In the year 2010/2011 Gatwick airport made £115.6m from retail, and another £51.7m from car parking, with an average of £5.80 spent on retail per passenger. Stansted retail spending per passenger is about £4.00 to £4.20. In the year 2010/2011 Heathrow made about £380 million per year on retail, Gatwick about £115, and Stansted net retail income fell from £79.8m in 2010 to £73.9m. Manchester made about £70 million on retail, with about £3 per passenger.
For the third year, Heathrow got the award (within the airports industry) for the top airport for shopping. Heathrow has over 52,000 square metres of retail space and more than 340 retail and catering outlets. Heathrow overtook Dubai International to win the title of “World’s Best Airport for Shopping” for 2012. Heathrow has the highest retail sales of any airport in the world ahead of Incheon airport in South Korea. Figures from the Moodie Report in February 2013 said that Net Retail Income per passenger at Heathrow was £6.21 (up 4.4% on 2011, partly due to the Olympics) in 2012 and £5.95 in 2011, while it was £5.64 in 2010. (By comparison the Net Retail Income at Stansted in 2012 was £4.27 per passenger). At Heathrow in 2012 the gross retail income increased +5.7% to £460.1 million
The key figure of net retail income per passenger climbed by +4.4% in the year to £5.82. This figure rose ahead of inflation, noted Heathrow (SP).
Overall retail income (including F&B, bureau de change and other services) climbed by +4.5% to £541.7 million.
Heathrow’s retail income increased +5.7% to £460.1 million and NRI per passenger increased +4.4% to £6.21. The underlying growth in Heathrow’s net retail income per passenger was slightly higher (around +5.5%) after adjusting for one-off benefits and Olympic-related income.
Heathrow’s duty and tax-free and airside specialist shops continued to see increases in the average spend
of passengers purchasing items in the in-terminal retail facilities. This was driven by factors including an increased proportion of higher spending non-EU passengers, refurbishment of Terminal 3’s airside shops and enhancements to World Duty Free’s stores in Terminals 3 and 4. In airside specialist shops, trading was buoyant in the luxury and fashion segments, the company said.
The performance of retail by category in 2012
A strong performance in bureaux de change at Heathrow was due primarily to improvements in contract terms with business partners. Catering income grew well ahead of passenger growth due to rebalancing of the portfolio towards premium outlets, enhanced contractual terms and a general focus on speed and quality of service. Finally in advertising, income growth was due to Olympic-related sales.
Stansted’s retail income decreased -1.9% to £81.6 million, outperforming the -3.2% decline in its passenger traffic. NRI per passenger increased +2.8% to £4.27. Catering, landside shops and bookshops and other retail income increased year-on-year although this was more than offset by declines elsewhere, particularly in car parking and duty and tax-free.
How the key income areas break down for 2012
Group-wide, passenger numbers were flat at 87.4 million. Group revenues rose by +8.1% to £2.46 billion, with adjusted EBITDA up by +11.6% to £1.26 billion. The group recorded a pre-tax loss of £32.8 million, a sharp improvement on last year’s £255.8 million.
The company noted that investment at Heathrow surged by +30% last year to £1.1 billion as Heathrow T2 nears completion.
Colin Matthews, Chief Executive Officer of Heathrow, said: “2012 was an historic year for Heathrow. We gave a warm welcome and a smooth journey to thousands of Olympic and Paralympic athletes, and greeted a record 70 million passengers over the twelve months.
“We also achieved record customer satisfaction levels, with three quarters of people saying they had a ‘very good’ or ‘excellent’ experience at Heathrow. Our capital investment programme continued, with over a billion pounds spent on improving the airport, mainly on the new Terminal 2 which opens next year. We also completed our refinancing programme, successfully issuing another £3 billion of bonds to put us on a stable, long term financial footing.”
Heathrow among top ten airports in the world – and top for shopping
Heathrow Airport makes it into the top ten.
London’s Heathrow Airport has been named among the top ten world airports at the World Airport Awards 2013.
Heathrow came tenth overall in the awards, organised by aviation research organisation Skytrax, but was credited with the best airport shopping in the world while the new Terminal 5 took the world’s best airport terminal title.
Singapore’s Changi Airport was voted as the world’s top airport at the annual ceremony, based on the votes of 12 million travellers from 108 countries worldwide. Amsterdam’s Schiphol was named as the best in Europe.
It is the first time that Heathrow has made it into the top ten, but the third year running they have taken the top shopping prize.
Heathrow Commercial Director Fidel Lopez said: “We’re delighted that our passengers have recognised Heathrow once again at the prestigious World Airport Awards for a fourth year in a row for our shopping and for a second time for Terminal 5.
“Next year will see the opening of Terminal 2 which will allow even more of our passengers to enjoy an experience similar that offered by Terminal 5 today.
“Later this year we will also begin to announce a range of exciting brands set to open in Terminal 2 as part of our work to remain on the cutting edge of retail trends.”
Airline customers name London Heathrow Airport as the world’s Best Airport for Airport Shopping
Mr John Holland-Kaye, Commercial Director, Heathrow Airport receives award for the Best Airport Shopping
Date?? 2013??
London Heathrow Airport wins award for the world’s Best Airport Shopping at 2012 World Airport Awards
London Heathrow Airport has the World’s Best Airport Shopping according to the 2012 World Airport Awards which were held at Passenger Terminal EXPO in Vienna. The award was decided by international passengers during a worldwide, 10-month survey.
“We congratulate Heathrow on winning the Best Airport Shopping Award for the second consecutive year. Heathrow has clearly not rested on its laurels after its previous success, and during 2011 the development of both Terminal 3 and Terminal 4 airside shopping areas has enhanced what was already an excellent shopping experience.” said Edward Plaisted of SKYTRAX.
John Holland-Kaye, Commercial Director of London Heathrow Airport said, “We are thrilled that Heathrow has been rewarded for a third time at the prestigious World Airport Awards. Terminal 5 is a great showcase of our vision of Heathrow’s future and the level of passenger experience we are working to deliver right across our airport. Together with a shopping experience which responds to our customer’s demands, we are proud that our work towards becoming Europe’s hub of choice is being recognised by the most important judge, our passengers.”
There was success for Hong Kong International Airport who finished in 2nd place, with Dubai International Airport completing the top 3. Incheon International Airport achieved 4th place with the newly renovated Sydney Airport completing the top 5.
World’s Best Airport Shopping. 2012 Winner Results
1 London Heathrow Airport
2 Dubai International Airport
3 Singapore Changi Airport
4 Hong Kong International Airport
5 Incheon International Airport
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Hub airport wins at World Airport Awards
20 April, 2012 (Heathrow Airport)
Heathrow has been named as the world’s Best Airport for Shopping’ for a third time at the World Airport Awards.
Heathrow has been named as the world’s Best Airport for Shopping’ for a third time at this year’s World Airport Awards, held yesterday (Thursday 19th April) at the Passenger Terminal EXPO 2012 in Vienna.
The awards were a double success for the UK’s hub airport as Terminal 5 was also named the world’s Best Airport Terminal following votes by airport passengers from across the globe.
The Skytrax 2011/12 World Airport Survey is the world’s leading independent study of airport passenger satisfaction and is widely regarded as the quality benchmark for the world airport industry, assessing customer service and facilities across 388 airports in 2012. The World Airport Awards are independent of any airport control or input and are therefore an impartial benchmark of airport excellence and quality.
Heathrow has over 52,000 square metres of retail space and more than 340 retail and catering outlets in total offering a wide range of premium brands and high street favourites including Paul Smith, Mulberry, Harrods, Ralph Lauren and Kurt Geiger. 2011 saw openings by Miu Miu and Spanish chain Zara – which opened its first ever UK airport store in Terminal 3. Pop-ups from Jack Wills and Ted Baker followed in Terminal 5 in late 2011/early 2012.
2011 was a record breaking year for Heathrow retailers who enjoyed an 8.8 per cent growth in gross turnover led by a boom in luxury spending from passengers using the UK’s only hub airport to connect from emerging markets.
Heathrow has the highest retail sales of any airport in the world ahead of Incheon airport in South Korea. Gross retail sales at Heathrow increased again in 2011 to £1.7bn/USD $2.6bn (2010: £1.5bn/USD $2.4bn), while Net Retail Income per passenger increased by 5.3 per cent to £4.35 (2010: £4.13).
Says John Holland-Kaye, commercial director at Heathrow: “We are thrilled that Heathrow has been rewarded for a third time at the prestigious World Airport Awards. Terminal 5 is a great showcase of our vision of Heathrow’s future and the level of passenger experience we are working to deliver right across our airport.
“Together with a shopping experience which responds to our customer’s demands, we are proud that our work towards becoming Europe’s hub of choice is being recognised by the most important judge, our passengers.”
How much profit do airports make from their retail activities, rather than flying?
13.2.2013Heathrow got 21.3% of its income from retail in 2010, compared to 53% from aeronautical. On average each Heathrow passenger spent about £5.70 (maybe £5.90) at the airport, with women spending more than men (!). BAA data say frequent fliers spend more than infrequent fliers. In the year 2010/2011 Gatwick airport made £115.6m from retail, and another £51.7m from car parking, with an average of £5.80 spent on retail per passenger. Stansted retail spending per passenger is about £4.00 to £4.20. In the year 2010/2011 Heathrow made about £380 million per year on retail, Gatwick about £115, and Stansted net retail income fell from £79.8m in 2010 to £73.9m. Manchester made about £70 million on retail, with about £3 per passenger.http://www.airportwatch.org.uk/?p=1045
The Doha talks are taking place at present, on global carbon emissions. The UN has confirmed that the amount of greenhouse gases in the atmosphere rose to record levels last year, reinforcing scientists’ warnings that the world is on course for dangerous global warming. TravelMole reports that this will cause more pressure to minimize tourism-related carbon emissions – principally from air travel and accommodation. Global warming will also threaten tourism destinations – principally small islands, delta destinations and winter sports destinations. Global CO2 was at 391 ppm in October, compared to the pre-industrial era level of 280 ppm. About 375bn tonnes of carbon have been released into the atmosphere since the start of the industrial era in 1750, and much of it remains there for centuries. Temperatures have already risen 0.8 C and stopping an increase of over 2C is not likely. The carbon emissions from global aviation are around 5% of anthropogenic climate change, taking into account the non-CO2 impacts (see below). World Tourism Organisation says tourism accounts for about half of all global air passengers.
Greenhouse gases hit record level and threaten tourism
28.11.2012 (TravelMole)
World may be on course for dangerous level of warming within 50 years
The amount of greenhouse gases in the atmosphere rose to record levels last year, the UN has reported, reinforcing scientists’ warnings that the world may be on course for dangerous global warming.
In which case there will be more pressure to minimize tourism-related carbon emissions – principally from air travel and accommodation. Global warming will also threaten tourism destinations – principally small islands, delta destinations and winter sports destinations.
Concentrations of carbon dioxide, the main greenhouse gas emitted by human activities such as burning fossil fuels in power plants, increased to 390.9 parts per million molecules in 2011, a sharp rise from the pre-industrial era level of 280 ppm.
Rising concentrations of the three gases in the Earth’s atmosphere threaten to render impossible the UN’s goal of containing the temperature increase to below 2 degrees Celsius of warming since industrialization, the International Energy Agency said earlier this month.
About 375bn tonnes of carbon have been released into the atmosphere since the start of the industrial era in 1750, the WMO said, mainly from burning fossil fuels such as coal, oil and gas.
About half of this carbon dioxide is still there, with the rest being absorbed by the oceans, forests and other life forms that absorb C02.
“These billions of tonnes of additional carbon dioxide in our atmosphere will remain there for centuries, causing our planet to warm further and impacting on all aspects of life on earth,” said the World Meteorological Organization’s (WMO) secretary-general Michel Jarraud. “Future emissions will only compound the situation.”
UN climate treaty envoys gather in Doha next week for two weeks of talks to extend targets under the current emissions- limiting deal, the Kyoto Protocol, and to lay the groundwork for a new pact in 2015 that will take effect from 2020. Greenhouse gases get their name from the way they absorb radiation within the Earth’s atmosphere and cause it to warm. Because they last so long, scientists say they could cause runaway climate change unless curbed.
Envoys are expected to finalise a second phase of the Kyoto protocol, the treaty adopted in 1997 that obliges industrialised countries to reduce their emissions.
They are also due to do more groundwork on a new climate pact agreed at last year’s talks in Durban, South Africa, which is due to be finalised by 2015 and enter force from 2020.
But many countries at the talks will be urging more rapid action to tackle the rise in greenhouse gas emissions before it is no longer possible to meet the UN target of holding the increase in global average temperature to less than 2 °C above pre-industrial levels.
Temperatures have already risen 0.8 degrees and scientists fear there could be 4°C warming by the end of the century unless there is action to reduce emissions.
Global greenhouse-gas emissions already have passed the point where the worst effects of global warming could be averted, and they are still rising, according to the third annual United Nations report on the so-called emissions gap.
Some countries have made pledges to help reverse this trend by lowering their emissions. However, the report by the U.N. Environment Programme warns that the gap between these pledges and reductions necessary to cap average global warming at 2 degrees Celsius (3.6 degrees Fahrenheit) by 2020 continues to widen.
“In addition we have one year less to close it,” said Niklas Höhne, one of the UNEP report’s lead authors.
The report, released shortly before an annual round of climate talks set to begin on Monday (Nov. 26) in Qatar, seeks to balance a heightened sense of urgency with a positive message.
“It is technically feasible and economically feasible that the gap can be closed,” Höhne, director of energy and climate policy at the independent research and consulting company Ecofys, told LiveScience.
The math
In 2009, at a meeting in Copenhagen, international negotiators agreed to the goal of capping global warming at 2 degrees C by 2020. Following the meeting, some nations submitted pledges to cut their emissions. The United States, for example, pledged to bring its emissions to about 17 percent below the 2005 level.
In the years since, nations have not made any substantial change to their pledges.
The UNEP report highlights the gap between these pledges and cuts needed put the world on a “likely” path to stay below the 2-degree target. It calculates that the annual emission rate by 2020 should be no more than 48.5 gigatons (44 metric gigatons) of carbon dioxide and other greenhouse gases. [8 Ways Global Warming Is Already Changing the World]
Using the most recent data available, for 2010, the report puts current emissions at 54 gigatons (49 metric gigatons). Extrapolate out to 2020, and the gap grows to between 8.8 and 14.3 gigatons (8 and 13 metric gigatons). Last year’s report put the gap at between 6.6 and 12.1 gigatons (6 and 11 metric gigatons).
This year’s report attributes the increase to faster-than-expected growth from 2009 to 2010 after the economic downturn. (More economic activity creates more greenhouse-gas emissions.) Improved accounting, taking into account situations in which two countries claim credit for the same emissions reductions, also contributed, the report stated.
(A word about these calculations: While carbon dioxide is the dominant greenhouse gas, others such as methane, which has potent warming effect but stays in the atmosphere for only a minuscule period of time compared with carbon dioxide, also contribute. The UNEP report lumps greenhouse gases together, describing them in terms of “carbon dioxide equivalent.” Because of the differences among the gases, not all scientists support this approach.)
Two sides of a story
Prior to the UNEP report, the World Bank released its assessment of a future resulting from no action, in which the average global surface temperature climbs by 3 degrees C (5.4 degrees F) or more and the world sees more extreme effects.
As emissions continue to climb, some climate scientists have said that an increase of 4 degrees C (7.2 degrees F) is a more likely scenario.
The World Bank report, called “Turn Down the Heat,” describes a future world of unprecedented heat waves, severe drought and major floods in many regions. The effects are expected to hit humans hard, particularly in the poorer parts of the world.
Both reports attempt to convey a positive message:
“With action, a 4-degree C world can be avoided, and we can likely hold warming below 2 degrees C,” the authors of the World Bank report write.
The UNEP emissions gap report, meanwhile, lists policies that, when implemented, could help narrow the gap. These include energy-efficiency standards and labeling for equipment and lighting; improvements in building codes; transportation infrastructure focused on mass transit, walking, cycling and waterways; and forestry policies such as Brazil’s increasing protection of areas in the Amazon and its investment in satellite-based monitoring to prevent illegal deforestation.
“There is certainly more action now than ever if you [look] at what is happening in different countries,” Höhne said.
Climate change, impacts and vulnerability in Europe 2012
EEA Report No 12/2012
This European Environment Agency (EEA) report presents information on past and projected climate change and related impacts in Europe, based on a range of indicators. The report also assesses the vulnerability of society, human health and ecosystems in Europe and identifies those regions in Europe most at risk from climate change. Furthermore, the report discusses the principle sources of uncertainty for the indicators and notes how monitoring and scenario development can improve our understanding of climate change, its impacts and related vulnerabilities.
They have produced a range of interesting charts, showing various climate impacts over the recent past and forecasts for future decades. These are at Charts
Aviation now contributes 4.9% of climate change worldwide
May 2009
Work by the IPCC now estimates that aviation accounted for 4.9% of man-made climate impacts in 2005. This contrasts with the 2% figure that is constantly quoted by aviation lobbyists, and 3% which the same authors quoted two years ago. They have now revised their estimates with 2 important changes: including for the first time estimates of cirrus cloud formation and allowing for aviation growth between 2000 and 2005. The effect of these is to increase aviation’s impacts to 3.5% without cirrus and 4.9% including cirrus. 23.5.2009 More …
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World Tourism Organisation says tourism accounts for about half of all global air passengers
Date added: January 19, 2012
UN World Tourism Organisation says tourism’s contribution to global climate change is about 5%. If tourism were a country, it would be the 5th largest emitter worldwide, ahead of Germany (6th) and Canada (7th). About 75% of total tourism carbon emissions are from travel. Of this air travel accounts for 40% of tourism’s contribution of CO2. Around half of air passengers globally are tourists. The number of air travellers is projected to double from 2007 to 2025 to more than 9 billion travellers a year. The industry would need to cut its carbon intensity in half by 2025 just to keep total emissions at 2007 levels. Globally, the number of international tourists is thought likely to reach one billion during 2012 – so perhaps half a billion tourists in Europe.
Sports Tourism seems to be a new angle of how to get people to spend more on their money on travel. There is sports tourism by those actively taking part in sports, like skiing, cycling etc. And there are spectator trips, with people attracted to large events like the Olympics, FIFA World Cup, F1 Grand Prix. Globally in 2003 the amount spent on sports tourism was about $51bn, equivalent 10% of the total international tourism market. VisitBritain says in 2011 some 900,000 football tourists visited Britain – (which included 61,000 from the USA). They £706 million in total – an average of around £785 per visitor – during their trip, which is around £200 more than average UK visitors who do not come here for sport. In August the Culture Secretary, Jeremy Hunt, said a priority is exploiting the role of sport as a magnet for tourists ….” The VisitBritain figures do not mention the numbers of Brits who fly abroad for sporting events elsewhere, taking their money abroad.
900,000 FOOTBALL-WATCHING VISITORS SPEND £706 MILLION WHILE IN BRITAIN
22 Oct 2012 (VisitBritain)
VisitBritain welcomes the world to watch our world-class football
As the Barclays Premier League kicks off again this week after a high-profile international break, new figures released by national tourism agency VisitBritain show that nearly one million overseas visitors watched a game of football here last year.
These 900,000 foreign football tourists spent a substantial £706 million, the equivalent of £785 per fan and £200 more than the average visitor (£583).
VisitBritain joined forces with the English Premier League back in 2008 to help promote the home of football in key overseas tourism markets using links to – and testimonials from – Premier League players and clubs. This partnership both builds interest in Britain and inspires fans to visit.
Around 40% of foreign fans going to a football match said that watching sport was the main reason for visiting the UK. The research also suggests that football works as a highly effective tool in enticing visitors to Britain at some of the quieter times of the year, with the greatest proportion of inbound visitors going to a football match between January and March.
Holiday visitors from Norway have the highest propensity to include ‘going to a football match’ (one-in-thirteen), followed by visits from the UAE. The markets generating the highest numbers of football spectating visits in 2011 were; Ireland (174,000), Norway (80,000), USA (61,000), Spain (54,000) and Germany (48,000). Mexico, Sweden and Iceland also featured highly in the category of ‘highest chance of going to a game’.
Football also encourages visitors to explore beyond London. The Premier League grounds attracting the largest number of overseas fans are in the North West. Nearly 20% of visitors who came here to see a game went to Old Trafford, followed closely by Anfield.
Sandie Dawe,Chief Executive of VisitBritain said: “The Premier League is known as the most international and exciting league in the world , supported by fans across the globe who want to find out more about their favourite players, come and see them play and explore their local areas.”
“Our partnership with the Premier League not only highlights the value of sports tourism to the UK economy, but it also helps drive inbound visits by inspiring travel to the UK at traditionally quieter times of the year.”
VisitBritain has used its partnership with the Premier League to film international players such as Sandro, Tim Howard and Brede Hangeland talking about where they love in Britain – the films can be found at www.visitbritain.com/football.
The Barclays Premier League is the biggest continuous annual global sporting event in the world. Across nine months of the year 380 matches are viewed in 212 territories worldwide and coverage of the matches is available in approximately 720m households.
Richard Scudamore, Chief Executive of the Premier League said: “The Premier League is now the most watched and supported football league in the world and there’s a huge amount of effort being made to connect with our 900m international fans. Our clubs have worked very hard to make Premier League grounds more welcoming and are striving to deliver a first-rate experience for all fans. Little though beats the thrill of a Premier League matchday and it’s very encouraging to hear that football can play an important role in increasing the numbers of international visitors to this country.”
Minister for Sport and Tourism Hugh Robertson said: “The Premier League is one of this country’s most successful exports and known the world over. It is no surprise that it has become a big draw for tourists who want to experience the most exciting league in the world in person. VisitBritain and the Premier League’s partnership is also showing overseas fans what more our country has to offer, helping to drive strong tourist spend.”
Inbound visits that include going to live sport
As part of a wider piece of research, VisitBritain analysed the visits that included going to a live sporting event – including football.
From Lord’s, Old Trafford and Wimbledon to Ascot, Wales Millennium Stadium and St Andrews, the list of venues where overseas visitors can enjoy our world-class sporting action stretches across Britain.
The survey found that around 1.3 million tourists went to a live sporting event in 2011, that’s 4 per cent of all visits, with the total amount spent by this group reaching £1.1bn.
Visitors who played sport in Britain spent £1.2bn, so as a total figure, sports tourism is worth £2.3bn to the UK economy each year.
The greatest volume of spectators for golf came from the USA, Rugby is unsurprisingly popular with the Irish and French with Cricket by far attracting the most spectators from Australia. A somewhat peculiar result is that residents of France are the next largest contributor to the cricket watching fraternity (could be ex-pat community). Horse racing is popular with visitors from Asia Pacific and Middle East but has truly global appeal.
Results taken from the VisitBritain sponsored question on the 2011 Office for National Statistics International Passenger Survey.
2. VisitBritain’s dedicated football content can be found at: www.visitbritain.com/football . VisitBritain destination content is also positioned on the Premier League website for the 2012-13 season for all teams. This includes a destination guide, things to see and do, as well as image and video content: www.premierleague.com/page/CityGuide
3. Last year VisitBritain launched a dedicated Premier League section on their website. This contains exclusive interviews with key international Premier League players on what they most like about living in Britain, as well as recommendations on what visitors should see and do while in the country
4. This is just the start of an extraordinary period for Britain hosting the world’s elite sportsmen and sportswomen, and of course those keen to come and support their efforts; the Rugby League World Cup in 2013, the Glasgow Commonwealth Games and Ryder Cup in 2014, the IRB Rugby World Cup in 2015, the World Athletics Championship in 2017 and the ICC Cricket World Cup in 2019 are all set to ensure that while the Olympic movement will be turning its attention the Brazil for the next Summer Games, Britain will remain centre-stage when it comes to sport.
It is estimated there were 420,000 visits from overseas to the UK in July and August primarily for the London 2012 Olympic or Paralympic Games (to participate, watch or work at).
260,000 of which were from Europe (210,000 from EU15 countries, 20,000 from A12 countries)
80,000 of which were from North America
80,000 of which were from elsewhere
2. In addition it is estimated a further 170,000 visits from overseas in July and August involved attending an official, ticketed Olympic or Paralympic event during their stay.
3. So in total it is estimated 590,000 visits from overseas to the UK in July and August were
primarily due to, or involved attending an official ticketed event at the London 2012 Olympic
or Paralympic Games.
4. In total it is estimated that these 590,000 visits involved spending around £760 million, on average spending £1,290. This includes all foreign money spent by overseas residents on their visit to the UK and would include any London 2012 tickets bought before or during the visit.
The Office for National Statistics (ONS) confirmed there were 3.18 million trips to the UK by visitors from overseas in July 2012 compared with 3.36 million last year.
It also showed the amount spent by tourists from abroad fell from £2.13 billion to just over £2 billion.
Meanwhile, UK residents made 5.75 million trips abroad in July this year compared with just under 5.74 million in July 2011.
During the Games next year, one website says: ”China will host 280,000 athletes, referees, journalists and other workers from more than 200 countries and regions, according to the Beijing Organizing Committee for the 2008 Olympic Games. And about 5 million overseas tourists came to Beijing during the year of the Games. link
Another website says Tourism experts forecasted approximately 2m tourists would flock to Beijing in the 2 weeks of the Games. It was estimated that 500,000 of these 2 million visitors would be coming from overseas. However, during the Games itself these numbers did not materialize.
No indication of how many Brits went to the Beijing Games.
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England’s sports tourism industry worth 2.3bn
24 Oct 11
New research by VisitBritain says England’s sports tourism industry is worth £2.3bn and sees around three million overseas visitors a year.
Britain’s national tourism agency also found nearly two million overseas visitors watch sport at venues across the UK each year. These sporting visitors spend an average of £900 per trip, almost twice as much as what the ‘average’ overseas visitor would spend.
The research is in light of Britain hosting the Rugby World Cup in 2015. The Rugby World Cup has continued to grow in stature since the first tournament took place in 1987 and is now the third largest sporting event in the world, sitting behind only the FIFA World Cup and the Olympics. It draws in a TV audience of billions of people over a six-week period in more than 200 countries across the globe.
Sport provides a boost for UK tourist industry as 900,000 football fans flock to Britain
By TravelMail
22 October 2012 (extracts)
The UK tourist industry has had a welcome boost from foreign sports fans after it was reported that 900,000 football tourists visited Britain last year.
The fans spent £706 million in total – an average of around £785 per visitor – during their trip, according to figures released by VisitBritain.
The tourism organisation said football was a ‘highly effective tool’ in enticing visitors to Britain at some of the quieter times of the year.
Around 1.3 million tourists went to a live sports event in the UK in 2011, spending a total of £1.1 billion.
But VisitBritain said sports tourism is worth £2.3 billion to the British economy as visitors who actually took part in sport spent another £1.2 billion on their hobby.
The average £785 spend by a traveller attending a football match is £200 more than the £583 spent by the average overseas visitor who did not end up on the terraces.
Getting to a game was the main reason for making the trip to Britain, according to 40 per cent of foreign football fans.
Following the research by the Office for National Statistics International Passenger Survey, tourist bosses have now identified football as a ‘highly effective tool’ in enticing visitors to Britain at some of the quieter times of the year, VisitBritain said.
Some 174,000 of the foreign tourists who watched a football match in the UK in 2011 were from Ireland, followed by 80,000 from Norway, 61,000 from the United States, 54,000 from Spain and 48,000 from Germany.
Visitors from Mexico, Sweden and Iceland also featured highly in the category of ‘highest chance of going to a game’.
Golf was most likely to draw in spectators from the US while rugby was popular with the Irish and French.
Cricket attracted most of its overseas spectators from Australia but in ‘a somewhat peculiar result’ the next largest group were residents of France, VisitBritain said. A possible explanation is that these may be expats.
Horseracing proved popular with visitors from Asia Pacific and the Middle East but also had global appeal.
VisitBritain chief executive Sandie Dawe said: ‘Our partnership with the Premier League not only highlights the value of sports tourism to the UK economy, but it also helps drive inbound visits by inspiring travel to the UK at traditionally quieter times of the year.’
Travel and tourism bosses believe that Britain’s tourist sector is now in a period of ‘unrivalled opportunities’ triggered by hosting a range of top-flight sports events and this year’s successful Olympic Games in London.
‘The Rugby League World Cup in 2013, the Glasgow Commonwealth Games and Ryder Cup in 2014, the IRB Rugby World Cup in 2015, the World Athletics Championship in 2017 and the ICC Cricket World Cup in 2019 are all set to ensure that while the Olympic movement will be turning its attention to Brazil for the next summer Olympic and Paralympic Games, Britain will remain centre stage when it comes to sport.’
Culture Secretary calls for post-Olympic tourism revolution
14 August 2012
• £8 million marketing campaign targeting Chinese visitors
• £2 million to boost domestic tourism marketing
• More domestic package breaks
• Boosting sport tourism
• Supporting cultural tourism
(extracts)
n £8 million marketing campaign aiming to triple the number of Chinese tourists visiting the UK, further investment in domestic tourism, plus increased sport and cultural tourism are at the heart of a renewed drive to create a lasting tourism legacy from the success of London 2012.
[One of the key planks of the strategy:
Exploiting the role of sport as a magnet for tourists by making the most of the opportunities of hosting upcoming world cups in rugby league, rugby union, and cricket - as well as the Commonwealth Games in 2014 and the World Athletic Championships in 2017.
Sport tourism has become one of the hottest businesses in sports. It is already one of the fastest growing sectors of the global travel and tourism industry with estimates of
its value in 2003 alone as high as $51bn, equivalent 10% of the total international tourism market.
Sport tourism encompasses both fans travelling to watch sport and people pursuing their sport abroad. The economies of cities, regions and even countries around the world are increasingly reliant on the visiting golfer and skier or the travelling football, rugby or cricket supporter.
The sport tourist is at the heart of strategies that spend tens of millions of dollars on attracting an Olympic Games or World Cup. These flagship events help build new
transport systems, improve airports and clean up cities – all because the sport tourist is coming to town.
Sport tourists are passionate, high-spending, enjoy new sporting experiences and often stimulate other tourism. Their direct benefit to a destination is cash – their indirect
benefit can be years of follow-on tourists. Sport tourism is now a tool to make achieve many things – to make money, create thousands of new jobs and even help
change cultural perceptions such as in the Middle East and South Africa.
www.sportbusiness.com/files/tourism_sum.pdf
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Sports Tourism set to take over Travel Industry
MARCH 28, 2012 (Busines Barbados)
India v West Indies - ICC Twenty20 World Cup Super Eights
In 2008, travel and tourism generated approximately US$5,890 billion of global economic activity.
With the contribution of travel and tourism to Gross Domestic Product (GDP) expected to rise from 9.9% in 2008 to 10.5% by 2018, the next decade will see tourism revenues exceeding US$10,000 billion. [It does not give any clues where this info comes from].
But what is at the epicenter of this eruption? The simple answer: Sports Tourism.
More and more, countries are becoming increasingly reliant on combining sport and tourism to jump start their recession-stricken economies.
Tourists who are engaged in travel-for-sport are typically high spending, stay longer than other tourist categories and often stimulate other tourism sectors.
Their direct benefit to a destination, such as Barbados, is cash; their indirect benefit can be years of return arrivals.
To prove it, look no further than the Olympic Games, the grandest of the world’s mega-sporting events.
Barcelona, already a popular destination with vacation makers, more than doubled its number of tourist arrivals in the 10 years following the 1992 Olympic Games. It has since become the sixth most attractive European city to locate a business, up from 11th place prior to the hosting of the Games.
Sydney generated US$2 billion in additional business following the 2000 Olympic Games. With unprecedented media coverage, tourism in Sydney has become a thriving economic force in the last decade.
But its not just the Games of the past, but the Games of the future, that will provide the real economic stimulus for the hosts.
A recent study commissioned by the Brazilian government, showed that the 2016 Olympic Games in Rio will provide a boost of more than US$24 billion from 2010 until 2027.
The 2016 Olympics and 2014 FIFA World Cup will also provide Brazil with a platform in which to attract foreign investment.
Brazil’s economy is currently the tenth largest in the world. Its predicted to be fifth by 2016.
Sports tourism is now a tool to make and achieve many things – to generate significant revenues, create thousands of new jobs, regenerate urban infrastructure, and to develop or reappraise entire destinations.
For South Africa, the more than 400,000 tourist arrivals for the 2010 FIFA World Cup meant a reappraisal of pre-tournament misconceptions – held by locals and visitors alike.
It was much the same for the Caribbean after the hosting of the 2010 ICC World Twenty20.
The 21st century is witnessing traditional sun and sea vacations – once the main stay of the travel and tourism industry – being replaced by sport-related vacations and a new breed of tourist keen to attend an ever increasing calendar of readily-accessible mega sporting events.
Sports Tourism – for many years the “sleeping giant” of travel – is set to play a catalytic role in the sparking of a new global tourism revolution.
And its already upon us.
Sports Tourism already contributes an astonishing 14% of overall travel and tourism receipts and this is set to grow exponentially over the next decade. [No details of where this comes from].
In 2011, international tourism receipts exceeded US$ 1 trillion for the first time, up from US$ 928 billion in 2010. In real terms, receipts grew by 3.8%, following a 4.6% increase in international tourist arrivals. The UN World Tourism Organisation UNWTO thinks this is a very good thing. “The past two years have shown healthy demand for international tourism out of many markets, even though economic recovery has been uneven. This is particularly important news for countries facing fiscal pressure and weak domestic consumption, where international tourism, a key export and a labour intensive activity, is increasingly strategic to balancing external deficits and stimulating employment.” International tourist arrivals grew by over 4% in 2011 to 980 million, according to the latest UNWTO World Tourism Barometer, and are expected to grow to one billion this year.
International tourism receipts surpass US$ 1 trillion in 2011
Madrid
07 May 12
In 2011, international tourism receipts exceeded US$ 1 trillion for the first time, up from US$ 928 billion in 2010. In real terms, receipts grew by 3.8%, following a 4.6% increase in international tourist arrivals. An additional US$ 196 billion in receipts from international passenger transport brought total exports generated by international tourism in 2011 to US$ 1.2 trillion.
According to the latest UNWTO World Tourism Barometer, international tourism receipts continued to recover from the losses of crisis year 2009 and hit new records in most destinations, reaching an estimated US$ 1,030 billion (euro 740 billion) worldwide, up from US$ 928 billion (euro 700 billion) in 2010. In real terms (adjusted for exchange rate fluctuations and inflation), international tourism receipts grew by 3.8%, while international tourist arrivals increased by 4.6% in 2011 to 982 million. This confirms the close correlation between both indicators, with growth of receipts tending to lag slightly behind growth of arrivals in times of economic constraints.
“These are encouraging results,” said UNWTO Secretary-General, Taleb Rifai. “The past two years have shown healthy demand for international tourism out of many markets, even though economic recovery has been uneven. This is particularly important news for countries facing fiscal pressure and weak domestic consumption, where international tourism, a key export and a labour intensive activity, is increasingly strategic to balancing external deficits and stimulating employment.”
“We trust that governments worldwide will progressively recognize this and engage in measures that support tourism including fairer tax policies and the facilitation of visas and travellers’ movements, as these have proven to stimulate economic growth and job creation,” he added.
By regions, the Americas (+5.7%) recorded the largest increase in receipts in 2011, followed by Europe (+5.2%),Asia and the Pacific (+4.3%) and Africa (+2.2%). The Middle East was the only region posting negative growth (-14%).
Europe holds the largest share of international tourism receipts in absolute numbers (45% share), reaching US$ 463 billion (euro 333 bn) in 2011, followed by Asia and the Pacific (28% share or US$ 289 billion/euro 208 bn), and the Americas (19% share or US$ 199 billion/euro 143 bn). The Middle East (4% share) earned US$ 46 billion (euro 33 bn) and Africa (3% share) US$ 33 billion (euro 23 bn) (see table below).
Asides from international tourism receipts (the travel item of the Balance of Payment), tourism also generates export earnings through international passenger transport. The latter amounted to an estimated US$ 196 billion in 2011, bringing total receipts generated by international tourism to US$ 1.2 trillion, or US$ 3.4 billion a day on average.
As a result, international tourism (travel and passenger transport) currently accounts for 30% of the world’s exports of services and 6% of overall exports of goods and services. As a worldwide export category, tourism ranks fourth after fuels, chemicals and food, while ranking first in many developing countries.
Strong growth in international tourism expenditure from the BRIC countries
Many source markets generated strong demand in 2011. However, it was the BRIC countries (Brazil, Russia, India, China) that continued to stand out. China’s expenditure on international tourism increased by US$ 18 billion to US$ 73 billion, the Russian Federation increased by US$ 6 billion to US$ 32 billion, Brazil by US$ 5 billion to US$ 21 billion and India by US$ 3 billion to US$ 14 billion. Together, their increases accounted for an additional US$ 32 billion, a value equivalent to the eighth largest source market by expenditure. Of the advanced economy source markets, Germany, Australia, Norway, Belgium and Canada reported the biggest absolute growth (see table 1).
Increases in receipts in emerging and advanced economy destinations alike
Both advanced and emerging economy destinations benefited from the 2011 growth in arrivals and receipts. Destinations where international tourism receipts grew by US$ 5 billion or more in absolute terms include the United States (increasing by US$ 13 bn to US$ 116 bn), Spain (by US$ 7 bn to US$ 60 bn), France (by US$ 7 bn to US$ 54 bn), Thailand (by US$ 6 bn to US$ 26 bn) and Hong Kong (China) (by US$ 5 bn to US$ 27 bn). Furthermore, significant increases on lower base value destinations were reported by Singapore, the Russian Federation, Sweden, India, the Republic of Korea and Turkey (see table 2).
International tourism to reach one billion in 2012
Madrid
16 Jan 12
International tourist arrivals grew by over 4% in 2011 to 980 million, according to the latest UNWTO World Tourism Barometer.With growth expected to continue in 2012, at a somewhat slower rate, international tourist arrivals are on track to reach the milestone one billion mark later this year.
International tourist arrivals grew by 4.4% in 2011 to a total 980 million, up from 939 million in 2010, in a year characterised by a stalled global economic recovery, major political changes in the Middle East and North Africa and natural disasters in Japan. By region, Europe (+6%) was the best performer, while by subregion South-America (+10%) topped the ranking. Contrary to previous years, growth was higher in advanced economies (+5.0%) than in emerging ones (+3.8%), due largely to the strong results in Europe, and the setbacks in the Middle East and North Africa.
“International tourism hit new records in 2011 despite the challenging conditions,” said UNWTO Secretary-General, Taleb Rifai. “For a sector directly responsible for 5% of the world’s GDP, 6% of total exports and employing one out of every 12 people in advanced and emerging economies alike these results are encouraging, coming as they do at a time in which we urgently need levers to stimulate growth and job creation,” he added.
Europe surpasses the half billion mark in 2011
Despite persistent economic uncertainty, tourist arrivals to Europe reached 503 million in 2011, accounting for 28 million of the 41 million additional international arrivals recorded worldwide. Central and Eastern Europe and Southern Mediterranean destinations (+8% each) experienced the best results. Although part of the growth in Southern Mediterranean Europe resulted from a shift in traffic away from the Middle East and North Africa, destinations in the Mediterranean also profited from improved outbound flows from markets such as Scandinavia, Germany and the Russian Federation.
Asia and the Pacific (+6%) was up 11 million arrivals in 2011, reaching a total 216 million international tourists. South Asia and South-East Asia (both +9%) benefited from strong intraregional demand, while growth was comparatively weaker in North-East Asia (+4%) and Oceania (+0.3%), partly due to the temporary decline in the Japanese outbound market.
The Americas (+4%) saw an increase of 6 million arrivals, reaching 156 million in total. South America, up by 10% for the second consecutive year, continued to lead growth. Central America and the Caribbean (both +4%) maintained the growth rates of 2010. North America, with a 3% increase, hit the 100 million tourists mark in 2011.
Africa maintained international arrivals at 50 million, as the gain of two million by Sub-Saharan destinations (+7%) was offset by the losses in North Africa (-12%). The Middle East (-8%) lost an estimated 5 million international tourist arrivals, totalling 55 million. Nevertheless, some destinations such as Saudi Arabia, Oman and the United Arab Emirates sustained steady growth.
Receipts confirm positive trend in arrivals
Available data on international tourism receipts and expenditure for 2011 closely follows the positive trend in arrivals.
Among the top ten tourist destinations, receipts were up significantly in the USA (+12%), Spain (+9%), Hong Kong (China) (+25%) and the UK (+7%). The top spenders were led by emerging source markets – China (+38%), Russia (+21%), Brazil (+32%) and India (+32%) – followed by traditional markets, with the growth in expenditure of travelers from Germany (+4%) and the USA (+5%) above the levels of previous years.
International tourism on course to hit one billon in 2012
UNWTO forecasts international tourism to continue growing in 2012 although at a slower rate. Arrivals are expected to increase by 3% to 4%, reaching the historic one billion mark by the end of the year. Emerging economies will regain the lead with stronger growth in Asia and the Pacific and Africa (4% to 6%), followed by the Americas and Europe (2% to 4%). The Middle East (0% to +5%) is forecast to start to recover part of its losses from 2011.
These prospects are confirmed by the UNWTO Confidence Index. The 400 UNWTO Panel of Experts from around the globe, expects the tourism sector to perform positively in 2012, though somewhat weaker than last year.
Governments urged to facilitate travel
As destinations worldwide look to stimulate travel demand under pressing economic conditions, UNWTO is urging governments to consider advancing travel facilitation, an area in which in spite of the great strides made so far there is still much room for progress. UNWTO advises countries to make the most of information and communication technologies in improving visa application and processing formalities, as well as the timings of visa issuance, and to analyze the possible impact of travel facilitation in increasing their tourism economies.
“Travel facilitation is closely interlinked with tourism development and can be key in boosting demand. This area is of particular relevance in a moment in which governments are looking to stimulate economic growth but cannot make major use of fiscal incentives or public investment,” said Mr. Rifai.
There are two things you can guarantee being present when you check into any hostel in the world: a sub-standard bathroom and a British backpacker. I’m not saying the two are in any way related, but what any traveler who has spent any time on the road will tell you is that they’ve run into a Brit. Ask what other nationality, and you’re likely to get Australian, then maybe German. Which begs the question: What country travels the most?
Turns out, it’s not exactly a straight-forward answer. Predictably, the travel statistics out there usually focus on where those travelers are going (France, followed by the U.S., Spain, China, then Italy). But there is scant data on where those travelers are coming from.
WorldHum blogged about a press release back in ’06 that stated Germans took 86.6 million trips abroad, Britons took 65.3 million, and Americans took 58.3 million. This didn’t necessarily mean those counties were the most traveled internationally. It just meant that those three countries took the most trips abroad overall.
Perhaps the best method of determining this question would be to examine how much money is being spent by each nationality internationally. To do this we can look at the recent UNWTO World Tourism Barometer, a newsletter put out by the U.N. agency devoted to tourism. (The .pdf is here.)
According to the report, it turns out money is a very good predictor of travel. It was estimated that in 2009, German travelers shelled out a whopping $80.8 billion while outside their country, followed by the United States ($73.1 billion), the United Kingdom ($48.5 billion), China ($43.7 billion) and France ($38.9 billion). Rounding out the top ten were Italy, Japan, Canada, Russia, and the Netherlands.
Germany
United States
United Kingdom
China
France
Italy
Japan
Canada
Russia
Netherlands
Of course these numbers could be a little skewed by the fact that a particular country happens to be a little more frugal than another while on the road, or that one country spends a lot of money in a neighboring country. But it paints a pretty accurate picture, and also seems to back up prior data.
Surprised by the results? Where are the Aussies? How about the Swedes? China about to overtake the U.K.?
The Global Climate Change summit has put greenhouse gases and global warming back on top of the world’s front pages.
There are many calls to cut emissions drastically before catastrophe strikes.
Many companies are developing products that are ‘green’. They produce less emissions, they require less energy to manufacture and they are easy to recycle. They say this will help stop the changes in the environment that are a result of the human race’s industrial activities.
I question the validity of the evidence for greenhouse gases and global warming. That’s something for a different discussion.
Nobody can doubt that the volumes of waste material produced which involve chemical compounds that do not and never did exist in nature are not making our environment a very safe or pleasant place to live.
Let’s assume that disaster is just around the corner and that, in 50 years the Earth will be a hot, sweaty, waterlogged radioactive slag heap. Is a consumer society that uses hybrid cars running on batteries (don’t ask what chemicals are in those!), a society that insists on going on at least 1 or 2 long haul flights per year, even in jet planes which use less fuel and produce less emissions, going to make the required difference?
The human race, in its current consumerist form is bad for the environment. Even when an initiative is taken to measure the carbon produced by industrialized nations, what do we do? We trade it. I find it hard to believe that this behavior is going to stop the changes we are told are happening.
So, where’s the ‘magic bullet’?
If I understand the arguments correctly, consumerism is causing all these problems, so logically, consumption needs to be restricted.
What would be the results of this?
The state would have to take control of industry and production to ensure that consumer goods were produced for “each, according to his ability; to each, according to his needs.”
Most people would not be content with working for less money than they make now, so any government enforcing this would need a powerful police force to keep order.
Since air travel creates a huge carbon footprint, international travel would have to be restricted to those who need it.
Sounds familiar?
Maybe the next time you see a hammer and sickle, it’ll be on a green background.
Figures from the USA of the amount US citizens spent on air travel, 2002 to 2008, and the excess of spending on air travel of US citizens, above non-residents coming into the USA
Analysts now know that the best place to learn about Chinese ultra-rich consumers is not the mainland. Rather the Maldives, double-chain of islands near the equator, proves to be the perfect place to launch a case study of Chinese consumerism. In 2010, more than 118,000 Chinese visited the country: a 109 percent increase from the year before, making the Chinese the number-one inbound market of the Maldives. Tourists here have helped form the new profile of Chinese consumers.
More Chinese are traveling overseas from smaller cities, places where growing middle classes are accumulating more wealth and do not face the financial pinch of rising housing prices and inflation felt by similar demographics in cities like Beijing and Shanghai, which, according to Vincent Liu, a partner at BCG in Hong Kong, will eventually impact the spending power of travelers from first-tier cities.
“Many of them are richer than those from major cities,” says Roger Wang, head of Lukintl, a Beijing-based tour company that has taken thousands of Chinese to America since it was founded in 1996. “The tourists from the main cities are mostly from the middle class, while tourists from smaller cities are millionaires or government officials. Usually they have strong spending power.”
According to Wang, this demographic will spend more than $100,000 abroad, using credit cards or with money sent to them via wire transfer from friends. They tend to seek out famous brands.
A close look at these vacationers has enabled luxury companies worldwide to tailor their marketing strategies. “They are eager to buy something, because when they come here, they carry a lot of money,” says Shi Hui Ling, a so-called “guest experience manager,” who was handpicked from a tourism school in Dubai by Six Senses, a resort on a tiny island in an atoll called Laamu, to provide special service to guests from her homeland. “Something unique, they want to buy this. They are looking for handmade [souvenirs], something very natural.”
However, it’s not just the unique that Chinese luxury vacationers are after: they still want the exclusive. Brands like Louis Vuitton are favorites in China and abroad. Travelers have no problem buying familiar products while on vacation, but they want the experience to be different.
“Our Chinese customers are buying more confidently into looks rather than individual pieces,” Jason Beckley, global marketing director at Alfred Dunhill, says. “They’re not impulse shoppers, and they’re discreet—they like a VIP or bespoke room, or even just to be offered tea or water when they are in the store.”
China’s Netizens, the name for the country’s 400 million web users, also offers creative labels the opportunity to enhance customers’ in-store experiences. “I think Internet shopping will be very hot in coming years,” says Wang. “People may choose the goods online and check when going abroad and finally buy. Because people here [in China] always doubt what is imported, I think overseas shops should have this business: reserve online and buy at the shop [abroad].”
To capitalize on the growing number of tourists from smaller cities, retailers abroad would do well simply to have salespeople who speak Chinese. But creating more brand awareness in China — beyond Shanghai and Beijing – will pay off both on the mainland and abroad.
A huge, and growing, proportion of the money made by airports is from retail. It seems that the industry expects significant increases in this spending over the coming years, and airports do all they can to get passengers to spend as much time as possible in retail, put retail outlets in arrivals, etc etc and devise means for them to buy goods for collection on their return, to avoid baggage problems. The industry expects most growth in the Far East, where women tend to spend a lot of designer brands. The airport retail industry finds passengers buy less when they are stressed by airport security waits and queues, and they buy more when calm and happy. Airports need a ticket as proof of identity, so they can monitor the types of travellers, and the routes, which generate the most cash. Seems the Chinese, the Russians and the Nigerians tend to spend the most. At Heathrow, the average passenger spends £4.35. But for fashion, the average BRIC passenger spends £45.50. No wonder BAA wants more.
Heathrow has been crowned the world’s best airport for shopping for the second year in a row. The accolade was awarded to Heathrow in the Skytrax World Airport Awards, one of the aviation industry’s most prestigious awards.
Retailers at London Heathrow Airport recorded a strong +8.8% rise in gross turnover in 2011, led by a boom in luxury spending from passengers using the UK hub to connect from emerging markets.
Gross retail sales at Heathrow increased in 2011 to £1.7 billion (2010: £1.5 billion), while Net Retail Income per passenger increased by +5.3% to £4.35 (2010: £4.13)*.
Total fashion & accessories sales across the airport posted +17.7% growth. The airport attributed this to its exposure to passengers from the BRIC nations – the rapidly expanding economies of Brazil, Russia, India and China – who spent an average of £45.50 in 2011, compared to £37.22 in 2010, as well as a strong portfolio of international luxury brands.
Airport research and passenger feedback has led Heathrow to continue to strengthen its strong portfolio of premium brands – which already includes Chanel, Hermès and Prada – with the opening of Miu Miu in Terminal 3 last autumn.
Pop-up stores have also contributed to the growth in sales of luxury goods. The Heathrow retail team said it had collaborated with brands including Jack Wills, Ray-Ban, Chanel Watches and Laduree. Heathrow was crowned the best airport for shopping for a second year running at the 2011 Skytrax World Airport Awards.
Heathrow Retail Concessions Director Muriel Zingraff-Shariff said: “Shopping for luxury retail goods in the UK is an attractive proposition for foreign visitors – and Heathrow’s price proposition makes it even more so. We now have passengers who are choosing to fly through Heathrow specifically to pick up items sold here and we have continued to witness a significant increase in demand for luxury goods from Chinese passengers as well as the Middle East with British brands such as Mulberry, Burberry and Smythson proving particularly popular.”
“As part of the modernisation and improvement of Heathrow we are continually seeking out new brands and retailers as well as developing new concept stores that we know will resonate with our target market.”
World Duty Free also performed strongly, posting growth of +12.7%. Heathrow’s retail performance is bucking the trend of UK high street sales where the most recent figures show a growth of just +1.3% according to the Office of National Statistics, and a -0.9% decline in footfall according to the British Retail Consortium.
The airport’s positive year in 2011 was capped by an encouraging report in ACI’s Airport Service Quality (ASQ) survey, which revealed that passengers say their overall customer experience at the airport continues to improve. 70% of passengers rated their experience at Heathrow as either ‘very good’ or ‘excellent’, which had risen from 68% in the same period in 2010 and 57% in 2008.
Heathrow Commercial Director John Holland-Kaye said: “These latest retail results are very encouraging and we are delighted that our retail partners and our airport team have worked so well together to deliver such an amazing performance in a time of economic slowdown. The strength of Heathrow’s retail offer is the range and value available – from everyday items like books and toiletries to luxury goods, our customers are spoilt for choice.
“The strength of this performance can also be attributed to Heathrow’s ability to connect with passengers from emerging markets in particular. It’s vitally important that Heathrow continues to be supported as it plays a significant role in bringing sustained growth to the UK.”
*Note: These figures are a subset of total commercial numbers and include all in-terminal shops, but exclude media, telecoms, car rental and car parking. This, said BAA, explains the slight difference from the Net Retail Income per passenger figures released earlier this month.]
Retail revenue reaches $1 billion at India’s airports
30 January 2012
Retail revenue at India’s airports reached US$1 billion in 2011, a study carried out by retail consultancy firm Asipac Projects has revealed.
According to The Times of India, the study showed airport retail business grew by 17-18% last year following an increase in passenger traffic and more people shopping while they travel.
Beauty, personal care and alcohol & tobacco were the top three purchases in the duty-free category while food & beverage, books, periodicals and stationary were the most popular choices in the duty-paid section.
Globally, airport retail revenue reached US$43 million with airports such as London Heathrow and Incheon Airport being the most lucrative, The Times of India reported.
“Airport stores are twice as productive for us compared to stores outside, in terms of sales per sq ft, though operational costs go up substantially at airports . Internationally, sales per sq ft are four to five times more compared to street stores at some of the busiest airports. We have a long way to go to reach those numbers,” Dipak Agarwal, chief executive (operations and strategy), DLF Retail, which runs retail stores like Mango and Boggi Milano at Delhi’s IGI Airport, told The Times of India.
Global Airport Retailing: Market Size, Retailer Strategies and Competitor Performance
Following a drop in sales in 2009 the global airport retailing market has bounced back. However, growth is being driven predominantly by passenger volumes, which are increasingly rapidly in emerging markets, rather than an increase in spend per passenger.
In 2011, Europe was the largest airport retailing market, however Verdict forecasts that it will be overtaken in size in 2012 by Asia Pacific.
The global airport retailing market is forecast to expand by 44.5% from 2010 to 2015 with most of this growth coming from emerging economies especially in Asia Pacific, which is forecast to grow by 76.2%, and the Middle East and Africa which is forecast to grow by 40.0%.
Fashion and accessories is the largest product category accounting for 25% of global airport sales in 2010. Sales of fashion and accessories have increased rapidly in recent years driven by the strong appetite for luxury brands in Asia Pacific.
In 2010 this region was responsible for 45.6% of fashion and beauty sales at airports.Walk through stores in airport terminals are growing in popularity. The format enables retailers to create an environment through which all consumers must pass to reach their departure gate. The shops, which tend to include flight information screens, are effective at targeting time scarce consumers.
Global airport retailing outlook, 2011–15- Global airport retail sales to reach $39.1bn by 2015.
Passenger numbers will increase globally by 2015. Spend per passenger will increase globally by 2015.
Airport retailing sales by category – Fashion and accessories is the largest product category in global airport retailing- Fashion and accessories is the dominant product category in Asia Pacific and the Middle East. Fashion and accessories will remain the largest retail category up until 2015.
The cost of travel determines passengers’ ability to fly and is linked closely with consumer disposable incomes. Flight routes determine passenger volumes at each airport-
Barriers to passenger spending – Worries over baggage allowance dampen passenger expenditure. Shortened shopping times decrease the time available for consumers to make purchases. Low disposable incomes reduce customers’ ability to shop. Security processes aggrieve consumers, putting them in a bad mood. Competition from alternative retail destinations can deter passengers from making purchases.
Strategies to drive passenger spending – Arrivals stores offer a new growth opportunity for retailers. Offering a home delivery service can combat luggage restrictions. Online duty free sites can drive sales from time-scarce consumers. Collect on arrival assists passengers affected by baggage restrictions to shop with confidence. Enforced footfall of walk-through stores creates major opportunity.
As aviation revenues reduce in the face of airlines increasing load factors rather than capacity, there is a need to increase non-aviation revenue airside. Passengers are spending too long waiting in queues, resulting in reduced dwell time in retail areas and a severely impacted willingness to spend.
It is widely acknowledged that an increased airside dwell time will lead to increased retail spend. Similarly, a passenger that passes through security and remains relaxed will also be more inclined to make purchases in airside retail outlets.
The lack of intelligence on dwell time and increased demand on airport processes makes it challenging to create an environment conducive to passenger expenditure.
In an ideal situation, passenger processing and progression through security should continue to run efficiently and effectively regardless of peak demand, delivering passengers airside who remain relaxed, and thus more inclined to spend, with additional time in retail concessions.
This ideal can only be achieved if an airport has an accurate measurement of passenger movements and dwell times at all stages of their journey. Key pinch points at security can only be eliminated as a result of proper planning and effective operation, particularly at peak times. Communication of wait times to passengers is often neglected, a simple process that will ensure they are well informed and remain relaxed.
The Increasing Non-Aviation Revenue (INAR) survey examined the current impetus for airports on increasing spend airside, rationalising the link between improved PAX measurement and processing and stronger retail performance.
Doing your shopping at the airport is one of the hottest UK retail trends, as travellers get wise to the money-saving benefits and increasing range of shops on offer. This year, UK airports have reported steep rises in shopper spend, and are developing increasingly sophisticated strategies to entice passengers to spend even more money.
With extensions and refurbishments in full swing, the two key trends are attracting new retailers – particularly luxury and fashion brands – and using the internet to ease and extend the retail experience.
As passengers are anxious to get through security early, airport retailers on the “airside” are best placed to exploit the captive audience.
“Effectively, it’s a retail lock in,” argues Fiona Hamilton, retail director of Jones Lang LaSalle, the property consultancy, which is advising several retailers on their expansion strategies. “Over 35m passengers pass through Gatwick a year, which is the same footfall as a very large shopping centre. The set-up costs for retailers might be slightly higher, but once you’re in, the sales densities are much greater.”
At Gatwick, passengers spend an average of 70 minutes milling around shops in the passenger lounge before proceeding to the departure gates.
“Airports offer a greater degree of resilience in a tough market than high streets,” says Vicky Wyatt, business development manager for retail at Gatwick Airport, which is about to unveil refurbishment plans for its South Terminal to retailers at Mapic, the retail property exhibition in Cannes. “Every day is Saturday. For most retailers, their airport business outperforms their high street stores. When they’re in the holiday frame of mind, passengers are more likely to spend on discretionary items in here than on the high street.”
Convenience is a powerful factor, but what about the prices? “There is a perception that you can only access the best prices if you fly outside of the EU but, with the exceptions of cigarettes and alcohol, the price advantages are the same – you won’t have to pay 20 per cent VAT, so goods are significantly cheaper than the high street,” she says.
However, not all shops are 20 per cent cheaper. Electrical goods, a low margin category, tend to benchmark prices offered on the high street and via internet sites such as Amazon. However, Ms Wyatt says that fashion is now the “key area” for retail expansion.
The first phase of the South Terminal’s redevelopment will complete in time for next summer’s passenger peak. “We’re keen to bring in brands that currently aren’t in the airport arena,” says Ms Wyatt, who hopes that direct routes to Vietnam, Nigeria and Malaysia will raise the ratio of wealthy international travellers who pass through Gatwick. Currently, 83% of passengers are British holiday makers.
The analytics of airport retail, where passengers must present a boarding card before purchasing, gives retailers much greater insight into who is buying what. “Retailers can easily monitor sales by airline, destination or nationality,” says Ms Wyatt. “They can quickly understand what passengers are looking for, and marry that information against the flight schedules, ensure they have appropriate language speakers on the staff, and even arrange their merchandise at certain times of day to target particular customer groups.”
For example, Nigerian women are very fond of buying shoes at the airport, but tend to have larger feet, so retailers can make sure they have good numbers of larger sizes in stock.
Getting passengers to buy before they leave home is another way of targeting cash-rich, time-poor customers. Heathrow has a very advanced web ordering service which can be used between one month and 48 hours before flying, which clearly shows the 20 per cent discounts on offer when measured against high street prices.
Passengers can browse goods and enter their flight details to reserve items, including many from designer retailers, at “airport prices”. Pre-ordering clothes and shoes is a little clunky – there is not yet a built in option to specify what size you need, for example – but if you try on reserved goods and are unhappy, there’s no obligation to buy. However, shoppers can only use the reserve and collect service for shops inside the specific terminal they are flying from, and may be asked to pay a deposit on higher value items.
Gatwick opened its e-shop this summer, and retailers including World Duty Free, Dixons and Boots have signed up to the service, which requires online shoppers to enter full flight details. It also has a “shop and drop” service, where duty free goods can be left at the airport, and picked up upon the return flight.
“The biggest seller so far is baby milk,” reports Ms Wyatt. “Families want to take the brand their child is used to, but don’t want to pack it inside suitcases, and can’t take it through security in hand baggage,” she adds.
At Heathrow, overall passenger spend was up 16.4% year-on-year to £208m ($333m) at the end of June.
“Passengers often chose to spend more money when they are flying and have been doing so for the last two years, which bucks the trend on the UK high streets,” says John Holland-Kaye, commercial director of BAA. “It is partly down to large numbers of international travellers, where we’re seeing a rise in visitors from emerging economies, especially Chinese passengers. They are quite discerning, and want to purchase luxury brands.” He says the Chinese spend the most, followed by the Russians and then Nigerians.
Multi-lingual Heathrow customer services staff, dressed in distinctive purple uniforms, stand below the departure boards. “They are they to provide general customer services, but their job has expanded,” says Mr Halland-Kaye. “A lot of passengers ask: ‘Where can I buy a watch?’ ”
Heathrow has recently installed China Union Pay terminals into the World Duty Free store in Terminal 3 to makes it easier for Chinese passengers to spend large sums.
“The more we make out of retail, the less we need to charge for people using the airport, which is important for keeping Heathrow competitive as a retail hub,” Mr Holland-Kaye adds.
Targeting passengers as they leave the airport is another potential growth area. At Dublin Airport, a Duty Free shop has been installed outside the “airside” zone where departing passengers get a last chance to buy tax free goods on production of a valid ticket.
With the competition for passengers’ spending money intensifying, it stands to reason that not all of these airport retail initiatives will have wings.
……………………………………………………………..
Retailers taking off at the airport
Despite the turbulence on the UK high street, retailers are launching plans to expand by taking stores at airports, both in the UK and internationally.
Some of the most high profile store openings this year have been from designer brands, tempted by the high-spending international traveller demographic. Miu Miu opened its first UK airport store at Heathrow this autumn, following hot on the heels of Harrods, which launched a “walk through” designer store in Terminal 3 with concessions from luxury brands including Cartier and Etro.
From the fashionable to the functional, WH Smith, the high street stationer, newsagent and bookseller, announced plans to treble numbers of airport stores at its full year results in October.
It currently trades from 32 airport stores in locations as diverse as India, Scandinavia and Australia and has signed up to take 28 more. Kate Swann, chief executive, expects the total airport store count to get “well into the hundreds” anticipating the airport portfolio to treble in size “in five to ten years”.
“It’s going to be a lumpy expansion,” she says. “You never see any vacant shop units in an airport. We can only expand where new space is being built, or if landlords retender space. Some years we will open 15 stores, some years it might be three times that number.”Airports in both the developed world, and developing countries, will both be using a franchise model.
In the UK, WH Smith is expanding its range of British souvenirs, with over 16 metres of shelf space devoted to Union Jack-adorned memorabilia in its largest airport stores. “It is to coincide with the Olympics next year,” says Ms Swann. “There will be more passengers coming into the UK, rather than UK customers departing. At our UK airport stores, we receive five times the spend from UK departing passengers than international passengers flying in. They’re less likely to buy English language newspapers, magazines and books.”
Mainstream fashion retailers are also gearing up to target the tourist trade, with Zara about to open a large store in Heathrow’s Terminal Five.
“It won’t be long before we see the likes of Apple, Hollister and Jack Wills taking space in airports,” argues Fiona Hamilton, retail director of Jones Lang LaSalle, a property consultancy which is currently advising on several airport retail-related transactions. “Retailers who previously would not have considered taking space inside an airport now realise there’s such a lot to go for.”
One of its many findings is that 32% of those passing through airports do not buy anything, and Marketing Week is keen to “move them further up the purchasing ladder”. They also grieve over the fact that business travellers, who should have more to spend, go straight to the lounge, avoiding retail opportunities.
Heathrow got 21.3% of its income from retail in 2010, compared to 53% from aeronautical. On average each Heathrow passenger spent about £5.70 (maybe £5.90) at the airport, with women spending more than men (!). BAA data say frequent fliers spend more than infrequent fliers. In the year 2010/2011 Gatwick airport made £115.6m from retail, and another £51.7m from car parking, with an average of £5.80 spent on retail per passenger. Stansted retail spending per passenger is about £4.00 to £4.20. In the year 2010/2011 Heathrow made about £380 million per year on retail, Gatwick about £115, and Stansted net retail income fell from £79.8m in 2010 to £73.9m. Manchester made about £70 million on retail, with about £3 per passenger.
– 21.3% of income in 2010 was from retail, compared to 53.1% from aeronautical. At about £5.73 per passenger, the highest of any European airport (with Gatwick the 2nd highest).
BAA Heathrow retail:
About £325 million in 2007 and 2008. About £350 m in 2009. About £390 million in 2010.
Influence of passenger mix on retail spend
• Long haul passengers significantly higher spenders than short haul • Origin and destination passengers higher spenders than transfer passengers – in terminal and they use car parks! • Intra-terminal transfer passengers higher spenders than inter-terminal passengers • Women higher spenders than men • Frequent fliers spend more than infrequent fliers
BAA says, of Heathrow:
• 35% of passengers are transfers
• 34% are travelling on business
• 57% are men
• 53% are flying long haul
CAGR means compound annual growth rate
Heathrow accounts to March 2011 state:
Retail Revenue
The Company’s net retail income was £12m (3%) higher than the forecast, despite lower passenger volumes.
The income lost from lower passenger numbers was recovered through the net retail income per passenger which was 16% higher than forecast, mainly driven by duty and tax free shops (including specialist airside retail) and bureau de change, where income per passenger was 31% and 24% ahead of forecast respectively.
Retail income year to March 2011 £379.1 million
Property income £129.6 million
Total revenue £1,853 million
which is 20.5%
Gatwick retail spending
Retail revenue increases at London Gatwick airport
Andrew Pentol
28-Jun-2011
Gatwick Airport Limited records total retail revenue of £115.6m in the year ended March 31 2011
Gatwick Airport Limited has revealed total retail revenue of £115.6m ($185.3m) for the financial year ended March 31 2011 compared to the £115m ($184.4m) for the same period last year.
According to Gatwick Airport Limited’s annual report, 31.6m passengers travelled through the airport, representing a 2.3% decrease year-on-year. The decrease in passenger numbers was driven by a number of factors, the most significant being the closure of aerospace in the three months to June 30 2010 following the eruption of mount Eyjafjallajokull in Iceland.
Despite the fall in passengers, duty-free, tax-free and specialist shops sales increased from £58.0m ($93m) in the year ended March 31 2010 to £58.9m ($94.4m) in the year ended March 31 2011.
Revenue from other in-store retail reached £36.5m ($48.5m) while net retail income per passenger rose £0.09 ($0.14) to £3.62 (£5.80) compared to the previous year.
Car parking income also increased £1.3m to £51.7m.
Gatwick Airport Limited is run by US investor Global Infrastructure partners following the acquisition of the airport from BAA.
Gatwick airport chief executive officer Stewart Wingate said: “We delivered strong performance in our first full year of new ownership despite the challenging environment and extraordinary events that affected major airports across Europe. Resilient passenger traffic combined with our relentless focus on cost efficiency helped us achieve solid financial results. We also successfully reinforced the business, enhancing our capital structure and establishing a strong liquidity position.
“We worked in partnership with the airlines to re-scope our new £1bn ($1.6bn) capital investment programme, which is now being delivered with greater efficiency and pace. Passengers and airlines are already benefitting from new, modern facilities and we are currently investing around £20bn ($32bn) per month. Operational performance and service standards have also improved significantly which is helping Gatwick compete to grow and become London’s airport of choice.”
BAA’s retail business continued to perform very well in the first six months to June 2011, with net retail income (NRI) per passenger increasing by 7.6% to £5.59 ($9.15) compared with £5.20 ($8.51) in 2010.
The performance was led by Heathrow where NRI per passenger was up 7.7% to £5.98 ($9.79) and by 4.2% to £4.10 ($6.71) at Stansted.
This performance was based on gross retail income increasing by 14.2% to £246.7m ($404m) and record Heathrow passenger traffic levels throughout the second quarter of 2011. Heathrow traffic grew by 9.1% in the six months to 32.9m, while Stansted traffic edged up 0.2% to 8.5m over the same period.
Breaking passenger traffic down by market across both airports, UK domestic accounted for 3m (+1.1%); Europe 20.9m (+7.5%); and long haul 17.4m (+7.8%).
DUTY AND TAX FREE LED SALES
BAA Management said the retail performance was led by duty and tax free, airside specialist shops, car parking and catering. Strength in duty and tax free was supported by a new walk-through area in the World Duty Free store in Terminal 3 and extension of the store in Terminal 5.
In airside specialist shops, the luxury segment continued to benefit from strong trading consistent with experiences in this sector outside airport outlets. Strength in car parking reflected increased usage, tariff increases and strength in premium business usage.
Stansted’s gross retail income increased 3.7% to £39.2m ($64.2m) compared with £37.8m ($61.9m) in 2010. BAA said that growth in Stansted’s retail income reflects a higher performance in car parking due to achieving higher yields per user.
Over the whole of 2011, the Group continues to expect growth in net retail income per passenger to moderate from recent levels to around 6%, as disclosed in the investor report issued in June 2011.
Retail income
Net retail income (“NRI”) declined 7.4% to £73.9m (2010: £79.8m). The main reason for this decline was the reduction in passenger numbers. NRI per passenger has been maintained around £4.04 due to initiatives stabilizing car parking income. Other income
Other income increased 0.9% to £23.6m (2010: £23.4m) largely due to rental income from
residential properties purchased in connection with the second runway project, transferred into investment properties from November 2010 onwards, offsetting a decrease in passengers with reduced mobility (“PRM”) income due to fewer passengers
Overall retail income of £69.8m has fallen by £0.6m, a reduction of just 0.9%, which is attributable to the reduction in income experienced as a result of the volcanic ash business disruption and after adjusting for this, income is estimated to have grown by 1.1%.
Income from retail concessions was £69.8 million in 2011 ( £70.4 in 2010) with total income £350.2 million in 2011 (and £ 349.8 in 2010). There were 22.8 million passengers, so spending about £3 per passenger on retail ?
That’s 20% of income.
Total income per passenger (not retail spend) was £7.1.
“A shopping centre with a runway attached,” is how one retailer describes the growing attractions of airports, which are leaving the UK’s high streets behind in terms of sales growth.
===
Airport operators have been quick to respond by upping their quota of luxury retailers. Harrods opened a “walk through” designer store after the redevelopment of Heathrow’s Terminal 3 this year, offering concessions from brands including Cartier, Ralph Lauren and Etro.
A spokesman reports “exceptional” sales to passengers from the Middle East, China, Russia and more traditional long-haul destinations such as the US.
This autumn, Miu Miu will open its first UK airport store at Heathrow, rubbing shoulders with British luxury brands Burberry and Mulberry, which also report record sales from their airside outlets. This all helped to push Heathrow’s overall passenger spending to £208m ($328.7m) in the six months to the end of June, a 16.4 per cent increase on the same period a year ago.
=======
Gatwick, which is orientated towards UK holidaymakers, also reports that UK shoppers are more likely to relax their discretionary spending when they are in a holiday mood.
======
Most retailers in Gatwick outperform their average high street store equivalent due to the captive audience – passengers spend 80 minutes on average in the departure lounge. To up the level of spend, the airport is in the process of redeveloping its retail space to create more “airside” than “landside” shopping, noticing that passengers find it easier to relax and spend once they are through security.
“When you’re in a holiday frame of mind, you’re more likely to spend on discretionary items here than on the high street, and the VAT saving makes it considerably cheaper,” she adds. Many new retailers can see the opportunity, she says, but have to weigh this up against the long opening hours (typically 4am to 10pm), security requirements of getting staff and stock airside, and reverse seasonality of trade.
“In the airport, it’s summer almost all year round,” she says. “High street retailers might not be selling bikinis in December, so it’s imperative we provide them at the airport.”
Heathrow’s profits rose by more than 10% last year, despite the UK’s largest international airport coming under repeated criticism for its poor service and standards.
Accounts for the private holding company that owns BAA, the airports operator,
show that Heathrow’s operating profits rose by £40 million to £438 million in 2007.
Profits at Stansted rose 68% to £86 million after BAA doubled the charge for each passenger using the airport.
The sharp rise in profits angered airlines who use BAA’s facilities.
They claim that the company is making huge profits but is failing to offer a
good service. Heathrow, in particular, has faced repeated criticism for long
security queues and the poor quality of its infrastructure.
The rising profits will provide airlines with further evidence that BAA is abusing
its position as the owner of London’s three main airports.
The Competition Commission is expected this month to deliver its preliminary
findings on whether BAA’s London monopoly should be broken up.
Jim Callaghan, the head of regulatory affairs at Ryanair, said: &lquot;BAA is abusing
its monopoly position by charging outrageous fees while providing a rubbish service
and that is why they can enjoy huge profit increases.&rquot;
BAA was bought by Ferrovial, the Spanish infrastructure company, in 2006 through
a subsidiary called Airport Development and Investment Limited (ADIL), which filed 2007 accounts with Companies House last week.
The ADIL figures show that revenue for BAA’s seven UK airports, as well as Naples
airport in Italy, was £2.2 billion, up 7.9% from the previous year. The company
made profits of £745 million, up 13.4%.
The accounts also show that ADIL is reducing the amount that it spends on new infrastructure at Heathrow, despite BAA’s claims that it is working to improve the facilities.
Capital expenditure was £875million last year compared with £977million in 2006.
BAA said yesterday that this was due to reduced spending on Terminal 5 as it
neared completion.
However, Ferrovial has been unable to reap the full rewards of BAA’s big profit
increase because of enormous interest payments on the debt taken to finance the
BAA acquisition.
ADIL was able to pay Ferrovial and its other backers only £86 million last year
after interest payments of £964 million.
ADIL’s total debt stands at £16.9 billion and Ferrovial has been unsuccessfully
trying to refinance in order to reduce the interest payments.
If it fails to refinance within the next two months, BAA’s credit rating is likely
to be moved to junk status.
Ferrovial has sold World Duty Free and part of its property portfolio in an attempt
to reduce its debt levels.
The criticism of Heathrow’s profits comes as British Airways faces its own problems
at the airport, particularly the recent chaotic move into its new home at Terminal
5.
Standard Life Investments, BA’s second-largest shareholder, has begun a series
of meetings with senior executives at the airline.
It is understood that Standard Life will meet Willie Walsh, BA’s chief executive,
today having spoken to Martin Broughton, the chairman, yesterday.
The problems at Terminal 5 are thought to be only one of a list of issues that
will be raised with management.
The meeting comes as investors are becoming increasingly alarmed at the bad news
coming from Britain’s flag carrier.
The T5 debacle followed a profits warning last month and shareholders are concerned
that a malaise has started to set in at senior management level.
“We need to be sure that BA is prepared for a deteriorating operational environment.
The economy is turning down and fuel costs have turned up” a shareholder said.
Airport retail: rise and rise of the shopping centre, with an airport attached
14.3.2012
A huge, and growing, proportion of the money made by airports is from retail. It seems that the industry expects significant increases in this spending over the coming years, and airports do all they can to get passengers to spend as much time as possible in retail, put retail outlets in arrivals, etc etc and devise means for them to buy goods for collection on their return, to avoid baggage problems. The industry expects most growth in the Far East, where women tend to spend a lot of designer brands. The airport retail industry finds passengers buy less when they are stressed by airport security waits and queues, and they buy more when calm and happy. Airports need a ticket as proof of identity, so they can monitor the types of travellers, and the routes, which generate the most cash. Seems the Chinese, the Russians and the Nigerians tend to spend the most. At Heathrow, the average passenger spends £4.35. But for fashion, the average BRIC passenger spends £45.50. No wonder BAA wants more. Details at: http://www.airportwatch.org.uk/?p=1723
and
European airports, like those in UK, make large part of their income as shopping centres
22.10.2012
Investors in airports are being drawn to the profit being made by the real estate and retail income they generate. Among European airports, Aeroports de Paris derived 39% of its revenue from real estate and retail in 2011; Zurich took in 50.3%; and Danish airport operator Koebenhavns Lufthavne A/S collected 33.6%. At TAV (Turkey), the share was 33%, and at Vienna it was 19%. Airports generally get the majority of their retail revenue after passengers check in and go through security. Goldman Sachs lists retail revenue as a major factor in recommending European airports to invest in. Two weeks ago, Fraport opened Pier-A-Plus, a terminal extension at Frankfurt, allowing Germany’s biggest hub to serve up to 6 million passengers a year and adding 50% to the airport’s retail space. According to ACI, air passenger numbers in Europe are up 2.3% this year compared to 2011, but Eurocontrol forecast that annual traffic growth will average 1.9% over the next 7 years in Europe, due to high oil prices and a weaker economic outlook. Details at http://www.airportwatch.org.uk/?p=3133
UN World Tourism Organisation says tourism’s contribution to global climate change is about 5%. If tourism were a country, it would be the 5th largest emitter worldwide, ahead of Germany (6th) and Canada (7th). About 75% of total tourism carbon emissions are from travel. Of this air travel accounts for 40% of tourism’s contribution of CO2. Around half of air passengers globally are tourists. The number of air travellers is projected to double from 2007 to 2025 to more than 9 billion travellers a year. The industry would need to cut its carbon intensity in half by 2025 just to keep total emissions at 2007 levels. Globally, the number of international tourists is thought likely to reach one billion during 2012 – so perhaps half a billion tourists in Europe.
Ironically, tourism is not just a victim of climate change but a sizable source of the problem. In terms of CO2 emissions, tourism’s contribution to global climate change is about 5%, according to the United Nations World Tourism Organization. If tourism were a country, it would be the fifth largest emitter worldwide, ahead of Germany (sixth) and Canada (seventh).
By far, the biggest portion of tour-ism’s CO2 emissions is associated with travel. About three-quarters of the industry’s emissions are generated from visitor travel to and from the destination, UNWTO says. Air travel in particular accounts for 40% of tourism’s contribution of CO2 and is the dominant source of emissions for medium-and long-haul travel.
Here lies the rub. Travel is a fundamental prerequisite of tourism – you can’t bring the beach to you, after all. Yet it is this journey that contributes to climate change the most. Richard Chartres, bishop of London, has gone so far as to suggest that “making selfish choices such as flying on holiday . are a symptom of sin.” Ouch! So much for that dream vacation to Thailand.
While some destinations have begun to take ambitious steps to reduce greenhouse gases, the scale of these reductions is often dwarfed by travelrelated emissions.
In Whistler, where sustainability is practically ingrained in the DNA, visitor travel accounts for roughly 86 per cent of the resort’s carbon footprint (about 78 per cent is from aviation). What this means is any local strategy to reduce emissions will only be a drop in the bucket in terms of minimizing the destination’s actual carbon impact.
For the most part, reducing the emissions from travel is beyond the influence of the destination. It is also improbable that destination marketing organizations will shift their marketing focus from “higher spending” distant markets to “lower yielding” regional markets because of potential opportunities to reduce emissions from air travel.
There is hope that the “sin” of air travel could be saved by technology. Looking into the future, a blended wing body aircraft design could be at least 30-per-cent more efficient than conventional airplanes. Fuel substitutes, such as blending algae fuels with existing jet fuel, could reduce flight emissions by 60-to-80 per cent. Eventually, liquid hydrogen produced from renewable sources could pro-vide a near zero-emission solution for air travel. However, the technological improvements needed to curb air travel impacts are decades away from happening. Large commercial hydro-gen aircraft, for instance, could be built by 2020 but will probably not enter service until closer to 2040.
In the meantime, rapid growth in air travel continues. The number of air travellers is projected to double from 2007 to 2025 to more than nine billion travellers a year.The industry would need to cut its carbon intensity in half by 2025 just to keep total emissions at 2007 levels.
This would be an improvement of 4% a year for an industry that historically achieves 2%. Not impossible, but very optimistic. For the foreseeable future, technology won’t likely provide a “silver bullet” – not in aviation anyway.
So what can an environmentally conscious travel bug do, short of rerouting that dream vacation to Thailand to a local camping trip in the Interior?
……… and it continues ……..
Joe Kelly teaches in the faculty of tourism and outdoor recreation at Capilano University.
UNWTO - Tourism Highlights – 2011 Edition – Facts and Figures for lots of detail.
In 2010, travel for leisure, recreation and holidays accounted for just over half of all international tourist arrivals (51% or 480 million arrivals).
Some 15% of international tourists reported travelling for business and professional purposes and another 27% travelled for other purposes, such as visiting friends and relatives (VFR), religious reasons and pilgrimages, health treatment, etc.
The purpose of visit for the remaining 7% of arrivals was not specified. Slightly over half of travellers arrived at their destination by air transport (51%) in 2010, while the remainder travelled over the surface (49%) – whether by road (41%), rail (2%), or over water (6%).
Over time, the trend has been for air transport to grow at a faster pace than surface transport, so the share of air transport is gradually increasing
See also
UN World Tourism Organisation press release
International tourism to reach one billion in 2012
Madrid 16 Jan 12
International tourist arrivals grew by over 4% in 2011 to 980 million, according to the latest UNWTO World Tourism Barometer.With growth expected to continue in 2012, at a somewhat slower rate, international tourist arrivals are on track to reach the milestone one billion mark later this year.
International tourist arrivals grew by 4.4% in 2011 to a total 980 million, up from 939 million in 2010, in a year characterised by a stalled global economic recovery, major political changes in the Middle East and North Africa and natural disasters in Japan. By region, Europe (+6%) was the best performer, while by subregion South-America (+10%) topped the ranking. Contrary to previous years, growth was higher in advanced economies (+5.0%) than in emerging ones (+3.8%), due largely to the strong results in Europe, and the setbacks in the Middle East and North Africa.
“International tourism hit new records in 2011 despite the challenging conditions,” said UNWTO Secretary-General, Taleb Rifai. “For a sector directly responsible for 5% of the world’s GDP, 6% of total exports and employing one out of every 12 people in advanced and emerging economies alike these results are encouraging, coming as they do at a time in which we urgently need levers to stimulate growth and job creation,” he added.
Europe surpasses the half billion mark in 2011
Despite persistent economic uncertainty, tourist arrivals to Europe reached 503 million in 2011, accounting for 28 million of the 41 million additional international arrivals recorded worldwide. Central and Eastern Europe and Southern Mediterranean destinations (+8% each) experienced the best results. Although part of the growth in Southern Mediterranean Europe resulted from a shift in traffic away from the Middle East and North Africa, destinations in the Mediterranean also profited from improved outbound flows from markets such as Scandinavia, Germany and the Russian Federation.
Asia and the Pacific (+6%) was up 11 million arrivals in 2011, reaching a total 216 million international tourists. South Asia and South-East Asia (both +9%) benefited from strong intraregional demand, while growth was comparatively weaker in North-East Asia (+4%) and Oceania (+0.3%), partly due to the temporary decline in the Japanese outbound market.
The Americas (+4%) saw an increase of 6 million arrivals, reaching 156 million in total. South America, up by 10% for the second consecutive year, continued to lead growth. Central America and the Caribbean (both +4%) maintained the growth rates of 2010. North America, with a 3% increase, hit the 100 million tourists mark in 2011.
Africa maintained international arrivals at 50 million, as the gain of two million by Sub-Saharan destinations (+7%) was offset by the losses in North Africa (-12%). The Middle East (-8%) lost an estimated 5 million international tourist arrivals, totalling 55 million. Nevertheless, some destinations such as Saudi Arabia, Oman and the United Arab Emirates sustained steady growth.
Receipts confirm positive trend in arrivals
Available data on international tourism receipts and expenditure for 2011 closely follows the positive trend in arrivals.
Among the top ten tourist destinations, receipts were up significantly in the USA (+12%), Spain (+9%), Hong Kong (China) (+25%) and the UK (+7%). The top spenders were led by emerging source markets – China (+38%), Russia (+21%), Brazil (+32%) and India (+32%) – followed by traditional markets, with the growth in expenditure of travelers from Germany (+4%) and the USA (+5%) above the levels of previous years.
International tourism on course to hit one billon in 2012
UNWTO forecasts international tourism to continue growing in 2012 although at a slower rate. Arrivals are expected to increase by 3% to 4%, reaching the historic one billion mark by the end of the year. Emerging economies will regain the lead with stronger growth in Asia and the Pacific and Africa (4% to 6%), followed by the Americas and Europe (2% to 4%). The Middle East (0% to +5%) is forecast to start to recover part of its losses from 2011.
These prospects are confirmed by the UNWTO Confidence Index. The 400 UNWTO Panel of Experts from around the globe, expects the tourism sector to perform positively in 2012, though somewhat weaker than last year.
Governments urged to facilitate travel
As destinations worldwide look to stimulate travel demand under pressing economic conditions, UNWTO is urging governments to consider advancing travel facilitation, an area in which in spite of the great strides made so far there is still much room for progress. UNWTO advises countries to make the most of information and communication technologies in improving visa application and processing formalities, as well as the timings of visa issuance, and to analyze the possible impact of travel facilitation in increasing their tourism economies.
“Travel facilitation is closely interlinked with tourism development and can be key in boosting demand. This area is of particular relevance in a moment in which governments are looking to stimulate economic growth but cannot make major use of fiscal incentives or public investment,” said Mr. Rifai.
The industry consensus forecast released by the International Air Transport Association (IATA) indicates that by 2014 there will be 3.3 billion air travelers, up by 800 million from the 2.5 billion in 2009.
International passenger numbers are expected to rise from 952 million in 2009 to 1.3 billion passengers in 2014. This 313 million traveler increase reflects a compound annual growth rate (CAGR) of 5.9%.
The fastest growing markets for international passenger traffic will be China (10.8%), the United Arab Emirates (10.2%), Vietnam (10.2%), Malaysia (10.1%) and Sri Lanka (9.5%).
By 2014, the top five countries for international travel measured by number of passengers will be the United States (at 215 million, an increase of 45 million), the United Kingdom (at 198 million with an increase of 33 million), Germany (at 163 million with an increase of 29 million), Spain (123 million with an increase of 21 million), and France (111 million with an increase of 21 million).
Domestic passenger numbers are expected to rise from 1.5 billion in 2009 to over 2 billion in 2014. This 488 million passenger increase reflects a CAGR of 5.7%.
China will record the highest CAGR of 13.9% and contribute an additional 181 million passengers. Other countries with double digit growth include Vietnam (10.9%), South Africa (10.6%), India (10.5%), and the Philippines (10.2%).
By 2014 the five largest markets for domestic passengers will be the United States (671 million), China (379 million), Japan (102 million), Brazil (90 million) and India (69 million).
The focus of the industry continues to shift eastward. By 2014, 1 billion people will travel by air in Asia Pacific. That’s 30% of the global total and a 4 percentage point increase from the 26% it represented in 2009.
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